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A  REPORT 


ON 


Large  Landholdings 


IN 


Southern  California 


With  Recommendations 


ISSUED  BY  THE 


Cahfornia  Commission  of  Immigration  and  Housing 


CALU'OUNIA  STATE  PRINTING  OFFICE 

SACRAMENTO 

19  19 


A  REPORT 


ON 


Large  Landholdings 


IN 


Southern  California 


With  Recommendations 


ISSUED  BY  THE 


California  Commission  of  Immigration  and  Housing 


oLPH    HAVNES   8. 


v:.CO    ^OV 


N  3^ 


Liu. 


CAMFOnNIA  STATE  PUINTINC  OKKICE 

SACRAMENTO 

1919 


■;Wi4l 


PERSONNEL  OF  THE  COMMISSION  OF  IMMIGRATION 
AND  HOUSING  OF  CALIFORNIA 


COMMISSIONERS. 

SIMON  J.  LUBIN,  Pkesident Sacramento 

MOST  REV.  E.  J.  HANNA,  D.D.,  Vice  Pbesident San  Francisco 

MRS.  FRANK  A.  GIBSON Los  Angeles 

J.  H.  McBRIDE,  M.D Pasadena 

PAUL  SCHARRENBERG,  Secbetaby San  Francisco 

Offices   of  the   Commission. 

Main  Office : 

Underwood  Building,  525  Market  street,  San  Francisco. 

Branch  Offices : 

526  Union  League  Building,  Second  and  Hill  Streets,  Los  Angeles. 

Rowell  Building,  Fresno. 

419  Forum  Building,  Sacramento, 

Council  Chamber,  City  Hall,  Stockton. 


0  o^^o     ,vf  V/ 


HP 


The  State  Commissi 
{)rotectmg  and  caring  for  the  immigrairt 

confronted  by  various  phases  of  the  land  problem,  and  particularly  by 
the  diflBculties  attending  the  prospective  settler  of  small  means  who 
tries  to  obtain  a  secure  footing  on  the  soil.  In  its  second  annual  report, 
under  the  heading  "The  Land  Situation,"  the  Commission  said: 

Few  will  take  issue  with  the  contention  that  California  should 
comfortably  support  many,  many  times  her  present  population. 
On  the  other  hand  it  must  be  conceded  that  there  have  been  times 
during  the  past  few  years  when  it  seemed  as  if  California  was 
unable  to  support  even  her  present  limited  population.  That  this 
paradoxical  state  of  affairs  does  exist  is  in  itself  conclusive  evidence 
of  a  weak  spot  in  our  social  structure. 

The  explanation  seems  to  rest  in  the  facts  that  on  the  one  hand 
growth  of  population  depends  upon  easy  access  to  the  land; 
whereas,  on  the  other  hand,  the  prospective  purchaser  finds  land 
either  obtainable  only  at  excessive  prices,  or  withheld  altogether 
from  the  market  by  those  who  refuse  to  sell  in  the  hope  that  the 
future  will  bring  them  a  much  higher  price.  To  this  increased 
value,  these  latter  contribute  nothing  but  mere  abstinence.  Land 
withheld  from  sale  is  practically  nonexistent ;  thus  the  available 
supply  is  limited,  and  consequently  prices  on  the  land  offered  for 
sale  are  artificial!}'  and  unnaturally  forced  up. 

Idle  and  unimproved  land  seems  to  constitute  one  of  the  safest 
and  most  profitable  investments.  And,  unfortunately  for  the 
unemployed,  the  investment  in  land  does  not  need  the  assistance  of 
labor  or  require  the  payment  of  wages,  nor  does  it  compel  owners 
of  wealth  to  bid  against  each  other  for  labor.  Wealth  may  thus  be 
invested  and  large  gains  realized  from  it  by  merely  waiting,  with- 
out its  owners  paying  out  one  dollar  in  wages  or  contributing  in 
the  slightest  degree  to  the  success  of  any  wealth-producing  enter- 
prise, while  ever}'  improvement  in  the  arts  and  sciences  and  in 
.social  relations,  as  well  as  increase  of  population,  adds  to  its 
value.  By  this  means  we  foster  unemployment,  yet  it  is  considered 
legitimate  business  to  purchase  land  for  the  avowed  purpose  of 
preventing  capital  and  labor  from  being  employed  upon  it  until 
enormous  sums  can  be  extracted  for  this  privilege. 

This  deplorable  situation  was  recently  splendidly  summarized 
as  follows: 

"California  wants  iinniigrants— with  money  enough,  earned 
somewhere  else,  to  buy  our  land  of  us,  at  a  higher  price  than  we 
paid  for  it. 

"In  other  words,  California  wants  customers.  We  are  looking, 
not  for  people  or  development,  but  for  mercantile  profit  in  a  com- 
mercial transaction.  And  we  have  the  goods  to  sell,  too;  the  mer- 
cantile bargain  is  a  good  one,  on  both  sides. 

"Is  this  too  cynical  a  view?  If  you  think  so,  just  try  the  experi- 
ment of  cross-examining  anybody   engaged  in   promoting  immi- 


-i-4fiM4 


69158& 


COMMISSION    OF   IMMIGRATION   AND   HOUSING. 

gration,  and  see  whether  it  is  human  beings  he  is  looking  for,  or 
cheek  books. 

"It  is  a  humilitating  confession,  and  we  shall  not  be  really 
civilized  so  long  as  it  remains  true.  What  we  really  need  is  human 
beings,  to  work,  to  transform  the  latent  resources  of  the  state  to 
active  wealth,  for  their  own  good  and  ours.  California  is  all 
right  and  the  workers  are  all  right.  If,  somehow,  they  can  not  be 
brought  together,  the  fault  is  ours.  We  are  not  organized  right: 
and  we  might  as  well  confess  it." 

In  brief,  the  evidence  seems  to  show  that  the  men  and  women 
of  California  who  are  building  up  the  state  and  creating  its  wealth 
are  tolerating  a  system  which  encourages  rather  than  prevents 
holding  and  speculating  in  idle  land. 

Those  who  have  made  particular  study  of  the  problems  of  unem- 
ployment and  immigration  realize  that  one  of  the  most  natural  out- 
lets, and  one  of  the  most  logical,  is  in  the  direction  of  releasing  to 
small  owners  the  land  now  held  in  large  parcels.  A  recent  study 
of  California's  assessment  rolls  reveals  the  following  striking 
examples  of  existing  conditions: 

In  Siskiyou  County  the  Central  Pacific  Railroad  Company  was 
assessed  for  664,830  acres  of  land,  being  approximately  36  per  cent 
of  all  land  assessed  in  that  county.  In  San  Bernardino  County 
the  Southern  Pacific  Land  Company  was  assessed  for  642,246  acres. 
Kern  County  had,.according  to  the  California  Blue  Book,  2,793,605 
acres  with  an  assessed  valuation.  The  assessment  rolls  showed  that 
nearly  one-half  of  that  vast  acreage  was  assessed  to  four  concerns, 
namely,  the  Southern  Pacific  Land  Company,  the  Kern  County 
Land  Company,  R.  F.  Elliott  (Trustee,  Tejon  Ranch),  and  Miller 
and  Lux.  The  total  California  holdings  of  Miller  and  Lux  approxi- 
mate 700,000  acres.  In  Merced  County  alone  245,000  acres  were 
assessed  against  this  corporation. 

There  is  no  evidence  to  show  that  large  land-holdings  are  con- 
fined wholly  to  California.  Competent  authorities  have  estimated 
that  the  total  gifts  to  the  public,  i.  e.,  national  land  grants  to  rail- 
ways, have  aggregated  more  than  215,000,000  acres.  There  does 
seem  to  be  ample  evidence,  however,  that  today  the  large  land- 
holders find  it  to  their  advantage  "to  hold  on"  to  the  vast  acreage 
of  unimproved  lands  in  their  possession. 

That  it  would  be  to  the  great  advantage  of  our  state  to  break  up 
these  large  holdings,  there  can  be  no  doubt.  Just  what  are  the 
best  methods  to  this  end,  the  commission  is  in  some  doubt.  There- 
fore, an  investigation  of  the  land  situation  within  this  state  is 
under  way ;  and  it  is  the  hope  of  the  commission  that  it  may  be  able 
to  offer  some  definite  suggestions  before  many  months  have  passed. 

Possibly  some  legislation  could  be  devised  that  would  directly 
break  up  the  large  holdings.  There  are  those  who  contend  that  a 
revision  of  our  methods  of  taxation  would  serve  that  end.  To 
transform  the  latent  resources  of  the  state,  they  say,  we  must  shift 
the  tax  burden  from  improvements  on  land,  such  as  houses,  trees, 
etc.,  and  from  personal  property,  such  as  horses,  cows,  merchandise 
and  other  products  oi  labor,  to  land  values. 


LARGE  LANDHOLDINGS  IN  SOUTHERN  CALIFORNIA.  O 

Those  who  look  to  taxation  as  the  remedy  point  to  the  fact  that 
the  California  assessment  rolls  show  that  our  tax  laws  enable  the 
owners  of  idle,  unimproved  land  to  escape  with  only  a  nominal, 
and  in  many  instances  a  positively  ridiculous,  low  tax.  For 
example,  22,061  acres  of  Central  Pacific  lands  in  Yuba  County  paid 
an  average  tax  of  6  cents  per  acre;  69,008  acres  assessed  to  the 
same  concern  in  Tehama  County  paid  7^  cents  per  acre;  16,000 
acres  owned  by  the  Agoure  interests  in  Ventura  County  paid  an 
average  of  8^  cents  per  acre ;  13,732  acres  assessed  to  the  Southern 
Pacific  Land  Company  in  Tulare  County  paid  an  average  of  4^ 
cents  per  acre. 

So,  though  good  citizens  may  question  the  advisability  of  adopt- 
ing radical  means  to  pry  the  land  monopolists  loose  from  their 
holdings,  all  must  agree  that  the  present  method  of  taxation  will 
not  do  it.  However,  whether  the  remedy  is  in  taxation  or  in 
some  other  method,  or  in  a  combination  of  both,  the  conmiission  is 
not  yet  prepared  to  say. 

In  furtherance  of  the  views  and  purposes  expressed  above,  the 
commission  decided  to  undertake  this  study.  Originally,  it  was  intended 
to  include  a  larger  area  than  that  herein  covered;  but  difficulties  and 
delays  ultimately  narrowed  the  field  of  inquiry  to  the  eight  counties 
south  of  the  Tehachapi.  No  other  study  of  the  kind,  so  far  as  is  known, 
has  been  made  in  the  state.  Some  statistics  of  large  holdings  were 
gathered  by  the  State  Tax  Commission  and  published  in  its  report 
(1917),  but  the  .subject  was  merely  incidental  to  the  main  inquiry  of 
that  commission,  and  the  material  was  not  developed  into  a  compre- 
hensive treatment  of  the  distribution  of  land. 

The  statistics  of  landholdings  given  in  this  report  have  been  compiled 
from  the  tax  records  of  the  various  counties.  Except  in  one  instance 
(that  of  the  Southern  Pacific  holdings  in  Los  Angeles  County,  for 
which  the  1918  figures  are  given)  they  are  all  for  the  year  1917.  Only 
holdings  in  excess  of  2,000  acres  were  regularly  listed.  The  minimum 
might  perhaps  more  pertinently  have  been  placed  at  1,000  acres,  or 
even  700  acres — for  these  also  are  excessive  holdings,  and  there  are 
many  of  them.  For  instance,  in  Ventura  County  alone  there  are  78 
holdings  ranging  from  700  to  2,000  acres.  In  choosing  the  2,000-acre 
minimum  the  (ommis.sion  merely  followed  the  precedent  of  the  State 
Tax  Commission. 

The  need,  it  may  be  said,  of  definite  information  on  the  subject  is 
vital  and  pressing.  Misinformation  is  general,  and  wholly  unfounded 
statements  are  made,  often  without  contradiction.  As  an  instance,  it 
may  be  noted  that  during  the  recent  political  campaign  the  statement 
was  repeatedly  made  and  widely  published  that  twenty  million  fertile 
acres  of  land  in  the  state  are  lying  idle.  As  a  matter  of  fact,  there  are 
not  twenty  million  fertile  acres  of  land  in  the  whole  of  California. 
The  Conservation  Commi.ssion.  which  in  1912  published  a  report  of  its 


6  COMMISSION   OF   IMMIGRATION    AND    HOUSING. 

survey  of  the  state,  gave  the  estimate  of  21,936,325  acres  of  what  it 
called  "agricultural  land"  of  which  the  irrigated  portion  was  only 
3,188,541  acres,  and  of  which  only  9,623,300  could,  in  its  judgment, 
ever  be  irrigated.  Though  the  term  "agricultural  land"  is  not  clearly 
defined  in  that  report,  an  analysis  of  the  detailed  figures  shows  that  it 
was  used  in  a  manner  broadly  and  even  extravagantly  inclusive.  When 
one  subtracts  from  this  aggregate  the  areas  underlaid  with  hardpan, 
the  areas  charged  with  alkali,  the  sinks  and  patches  of  "hog  wallow" 
and  the  considerable  areas  for  which  there  is  an  inadequate  water  sup- 
ply, or  no  supply  at  all,  one  finds  a  conjectural  total  which  can  not 
possibly  reach  twenty  million  acres.  What  proportion  of  this  total 
lies  idle  no  man  can  say ;  and  no  guess  made  on  the  basis  of  any  data 
now  available  is  of  much  value. 

The  collecting  and  classifying  of  this  information  is,  however,  not 
an  easy  task.  The  contents  of  assessors'  and  tax  collectors'  books  are 
not  arranged  for  the  gleaning  of  this  particular  sort  of  knowledge; 
while  in  the  case  of  Los  Angeles  County  the  enormous  number  of  entries 
presents  at  first  sight  an  unexplorable  jungle  which  might  appall  the 
most  ardent  investigator.  Ownership,  moreover,  is  in  many  ways  dis- 
guised and  can  not  always  be  ascertained  from  the  records.  Data  on 
related  matters,  and  from  sources  other  than  the  tax  records,  is  some- 
times so  meager  and  again  so  conflicting  that  upon  certain  points  the 
investigator  can  express  only  conjecture  instead  of  substantiated  fact. 
Yet,  it  is  believed  that  the  findings  here  assembled  may  supply  some 
much-needed  information,  and  that  the  accompanying  suggestions  may 
aid  in  the  application  of  a  remedy  for  a  gross  and  long-continued  evil. 

The  findings  of  fact,  or  of  reasonable  approximation,  are  as  follows: 

1.  That  in  the  eight  counties  of  southern  California  there  are  279 
holdings  (reducible  by  allowing  for  duplications  to  about  255  holdings) 
each  of  more  than  2,000  acres,  comprising  an  aggregate  of  4,893,915 
acres. 

2.  That  the  Southern  Pacific  grant  lands  and  "lieu  lands"  in  five  of 
these  counties  (there  are  none  in  the  other  three  counties)  aggregate 
2,598,775  acres. 

3.  That  of  the  total  of  nonrailroad  and  nonpublic  rural  lands  in 
these  counties,  roughly  approximated  by  the  federal  census  figures  of 
"lands  in  farms"  (4,587,581  acres),  2,295,140  acres,  or  50  per  cent,  are 
owned  in  about  250  holdings. 

4.  That  apart  from  the  railroad  lands,  there  are  at  least  32  holdings 
each  of  more  than  15,000  acres;  that  seven  of  these  holdings  exceed 
50,000  acres  each ;  that  one  of  them  is  of  101,000  acres  and  another  of 
183,399  acres. 


I.AKGE    I.ANDIIUI-DINGS    IN    SOITJIERX    CALIFORNIA.  7 

h.  That  of  the  2.295,140  acres  mentioned  above,  at  least  666,886 
aeres,  or  29  per  cent,  are  now  or  potentially  tillable. 

6.  That  a  considerable  part  of  this  tillable  land  Has  idle,  and  that 
another  considerable  part  of  it  is  not  devoted  to  its  most  beneficial  use; 
that  though  tliere  are  many  thousands  of  persons  eager  to  get  access 
to  this  land,  much  of  it  is  not  for  sale  under  any  circumstances,  and 
that  such  portions  as  are  for  sale  are  held  under  prices  usually  beyond 
tlie  productive  value  and  on  terms  of  paj'ment  Avhich  mean  great  hazard 
or  ruin  to  the  purchaser. 

Some  remedial  suggestions  follow.  They  include  the  extension  on 
a  large  scale  of  the  plan  of  the  Laud  Settlement  Board.  But  they  lay 
the  greatest  emphasis  on  the  need  of  making  large  landholdings  unprof- 
itable, and  to  this  end  the  recommendation  is  made  of  a  graduated 
laud-value  tax. 

PART  I. 
A  STATEMENT  OF  CONDITIONS. 


THE  LAND  AREA. 

The  land  area  of  the  eight  counties  of  southern  California,  according 
to  the  Federal  Census,  is  28,919,680  acres,  almost  identical  with  that 
of  the  State  of  Pennsylvania. 

Of  this  area  the  three  national  forests — the  Santa  Barbara  (which 
also  comprises  some  240,000  aeres  in  San  Luis  Obispo  and  Kern 
counties),  the  Angeles  and  the  Cleveland — cover,  according  to  the  fig- 
ures of  the  Forest  Service  for  June  30,  1917,  a  total  of  2,811,705  acres. 

The  area  of  the  vacant  public  lands  was,  on  July  1,  1917,  according 
to  the  figures  of  the  General  Land  Office,  11,035,795  acres. 

The  area  of  the  vacant  school  lands  was,  at  the  same  time,  according 
to  the  report  of  the  Surveyor  General,  351,325  acres. 
SOUTHERN  PACIFIC  HOLDINGS. 

ITie  grant  lands  and  ''lieu  lands"  held  by  the  Southern  Pacific 
Land  Company  and  the  Southern  Pacific  Railroad  Company  comprise 
2,598,775  acres  in  the  counties  of  Los  Angeles,  San  Bernardino,  River- 
side, Imperial  and  San  Diego.  The  railroad  owns  no  grant  lands  in 
Ventura  or  Santa  Barbara  counties,  and  the  small  tract  held  in  its 
name  in  Orange  County  is  doubtless  a  part  of  a  purchase.  In  Los 
Angeles  County  there  is  an  uncomputed  area  of  which  the  legal  status 
Ls  in  dispute,  and  from  which  the  Southern  Pacific  Land  Company 
selects  its  "lieu  lands"  in  compensation  for  mineral  lands  filed  upon. 
This  area  lies  parallel  to  the  lines  of  the  Southern  Pacific  railroad  and 
between    the   twenty-mile   and   thirty-mile   limits,    north    of   the   San 

3—45044 


8  COMMISSION    OF    IMMIGRATION    AND    HOUSING. 

Gabriel  Mountains.  From  this  area  some  26,000  acres  were  patented 
by  the  company  in  1918.  In  the  remainder  of  this  nncomputed  area 
may  be  as  much  as  50,000  acres. 

No  other  railroad  company  owns  grant  lands  within  any  of  the  eight 
southern  counties,  though  the  Atchison,  Topeka  and  Santa  Fe  Railroad 
Company  owns  a  purchased  tract  of  8,752  acres  in  San  Diego  County. 
The  railroad  lands  lying  along  the  line  of  the  Atchison,  Topeka  and 
Santa  Fe  railway  between  Needles  and  San  Bernardino  were  originally 
granted  to  the  Atlantic  and  Pacific  Railway  Company,  to  whose  rights 
the  Soutliern  Pacific  Company  succeeded,  but  though  the  railway  was 
subsequently  sold  by  the  latter  company,  the  ownership  of  the  lands 
Avas  retained. 

The  detailed  figures  of  the  Southern  Pacific  holdings  are  as  follows: 


County 


San  Bernardino- 
Patented   — 

Unpatented    


*971,624 
299,302 


Riverside- 
Patented   .- 
Unpatented 


t341,V23 
349,228 


Imperial- 
Southern  Pacific  Land  Company. 
Pann  Lands  Association 


Los  Angeles   (patented). 

San  Diego   (patented)... 

Total 


t 391, 056 
39,352 


Total  acreage 

1,270,926 

690,951 

430,408 

137,463 

69,027 

2,598,775 


•Includes  46  holdings,  aggregating  32,886  acres,  sold  under  contract,  but  title  to  which  is 
still  retained. 

tincludes  319  holdings,  aggregating  68,849  acres,  sold  under  contract,  but  title  to  which  is 
still  retained. 

JIneludes  2,&50  acres  assessed  to  the  Southern  Pacific  Railway  Company,  as  distinguished 
from  the  Southern  Pacific  Land  Company. 

This  company  owns  a  tract  of  825  acres  in  Orange  County  and 
1,121  acres  partly  in  Orange  and  in  Riverside  counties,  the  figures  for 
which  are  included  in  the  figures  given  above. 

The  lands  of  the  Imperial  Valley  Farm  Lands  Association,  a  selling 
agency,  are  included  in  the  figures  for  the  company's  holdings  in  Im- 
perial County.  This  year  (1918)  these  lands,  which  were  for  the  three 
previous  years  assessed  in  the  name  of  Clarence  I.  Whitesell,  of  Los 
Angeles,  are  again  assessed  to  the  Southern  Pacific  Land  Company. 


LARUE    LANDHOLOINGS    IN    SOITIIEUN    CALIFORNIA.  if 

LAND  IN  FARMS. 

Luiid  in  lariiis,  according  to  the  Federal  Census  of  1910,  comprises 
4,587,581  acres.  Townsites  and  rights  of  way  make  up  the  remainder 
of  the  total  of  28,919,680  acres. 

Only  a  fraction  of  this  immense  domain  of  nearly  29,000,000  acres  is 
suited  to  agriculture  proper.  The  4,587,581  acres  given  in  the  Federal 
Census  of  1910  as  "land  in  farms"  include  large  tracts  on  which, 
according  to  current  opinion,  cultivation  will  forever  be  impossible. 
The  term,  as  employed  in  the  census,  comprises  not  only  tillable  land 
but  land  used  for  the  ' '  raising  of  animals,  fowls  and  bees. "  It  includes 
even  more  than  this.  How  generously  it  was  extended,  in  its  census 
use,  is  illustrated  by  the  fact  that  the  figures  for  "land  in  farms"  for 
Santa  Barbara  County  actually  exceed  by  nearly  10,000  acres  the  net 
nonpublic  acreage  of  the  county.  In  the  main  the  term  may  be  said 
to  include,  in  its  application  to  southern  California,  all  land  not  in 
townsites,  rights  oi  way,  national  forests,  the  public  domain  and  rail- 
road and  school  grants.  It  probably  even  includes  such  of  the  railroad 
lands  as  have  been  bought  but  not  fvilly  paid  for  and  such  of  the  school 
lands  as  have  been  leased  for  agriculture  or  stock  raising.  It  no  doubt 
includes,  in  many  cases,  considerable  areas  of  mineral  and  oil  lands. 

The  figures  on  improved  land  are  much  more  to  the  point.  The  total 
is  here  1,862,771  acres,  or  40  per  cent  of  the  area  of  "land  in  farms," 
and  6.4  per  cent  of  the  land  area. 

The  subjoined  table,  compiled  from  the  Federal  Census  for  1910,  gives 
the  total  acreage,  the  acreage  of  "land  in  farms"  and  the  acreage 
improved.  Each  of  these  counties  has  since  increased  its  improved 
acreage.  Imperial  County  has  more  than  doubled  the  number  of  its 
acres  in  farms  and  the  number  of  its  acres  improved.  The  figures 
follow : 


County 

Land  area, 
acres 

111  farms, 
acres 

Improved, 
acres 

Santa    Barbara    ..  _.. 

1,753,600 
1,201,920 
2,602,880 
508,800 
2,701,440 
4,633,600 
12,900,480 
2,616,960 

1,120,475  ■ 
550,199 
757,985 
371,692 
834,428 
520,806 
208,396 
223,«)2  1 

215,552 

Ventura    .. 

213.868 
418,998 

Los  Angeles  

Orange    

189,463 

San  Diego  , 

234,045 

Riverside 

278,151 

San  Bernardino 

136,625 

Imperial .                       - 

176,069 

Totals 

28,919.680 

4,587,681  1 

1 

1,862,771 

AGRICULTURAL  LAND. 


The  State  Conservation  Commission,  in  1912,  estimated  for  these 
eight  counties  a  total  of  6,070,325  acres  of  agricultural  land.  As  only 
745,486  acres,  or  12  per  cent,  were  at  that  time  irrigated,  and  as  only 


10  COMMISSION    OF   IMMIGRATION    AND    HOUSING. 

J, 949, 600  acres,  or  30  per  cent,  ever  could,  in  the  opinion  of  the  com- 
mission, he  irrigated,  the  total  hecomes  questionable,  unless  l)ased  on 
the  expectation  of  a  vast  extension  of  dry  farming.  But  the  geograph- 
ical limits  of  dry  farming  are  exceedingly  circumscribed.  Along  the 
coastal  plain,  and  within  a  narrow  strip  adjacent  to  the  ocean,  beans 
(especially  limas)  draw  enough  moisture  from  the  fogs  to  develop 
bountiful  crops,  while  in  the  mountain  country  the  amount  of  rainfall 
is  sufficient  to  develop  moderate  crops  of  barley  and  other  grains.  But 
neither  on  the  interior  plains,  except  in  rare  patcbes,  nor  on  the 
so-called  desert  is  dry  farming  a  possibility.  The  total  given  thus 
seems  greatly  excessive.  By  no  methods  at  present  known  can  cultiva- 
tion be  extended  to  more  than  70  per  cent  of  these  6,070,325  acres. 
The  figures  follow: 


„„.„„„  Agricultural     ;        Irrigated,  Ultimately 

lesions  I       ^^^^   ^„^^  g^^es  irrigable, 

iicres 


Santa  Barbara  and  Ventura 

Los  Angeles  and  San  Gabriel  River  lands. 

Santa  Ana  River  lands 

San  Diego  County 

Colorado  Desert  and  River  valleys 

Mojave   Desert   

Totals 


509,250 

49,656 

322,500 

441,986 

167,454 

381,500 

876,671 

213,407 

279,000 

363,668 

19,880 

87,1C0 

1,550,750 

279,600 

766,500 

2,328,000 

15,489 

113,000 

6,070,325 

1 

745,486  1 
1 

1,949,600 

DISTRIBUTION  OF  LAND. 

The  land  area  of  these  eight  counties  is  distributed  with  gross  unfair- 
ness. There  are,  including  the  railroad  lands,  279  holdings  of  more 
than  2,000  acres  each,  aggregating  4,893,915  acres.  Fifty-seven  of  the 
holdings  in  these  counties,  each  of  more  than  10,000  acres,  aggregate 
4,040,512  acres.  Excluding  the  Southern  Pacific  lands  (without  allow- 
ing for  duplications),  there  are  274  holdings  in  exces,s  of  2,000  acres 
each,  aggregating  2,295,140  acres. 

These  figures  have  to  do  with  rural  land.  The  distinction  between 
urban  and  rural  land  is  easily  made  in  seven  of  the  eight  counties.  But 
in  Los  Angeles  County  the  county  seat  is  a  city  with  legal  boundaries 
spreading  far  out  beyond  the  actual  urban  sections.  Great  areas  thinly 
populated  lie  within  these  l)oundaries.  Beyond  the  boundaries  are 
other  areas  regarded  as  potentially  urban — as  territorj^  that  sooner  or 
later  will  be  occupied  largely  or  solely  for  residential  purposes.  Nearly 
all  of  this  territory  beyond  the  built-up  urban  sections  (whether  within 
or  without  the  legal  boundaries)  to  a  distance  of  many  miles  in  all 
directions  from  the  center  of  the  city,  is  mapped  out  and  recorded  in 
the  form  of  '  *  tracts. ' '  These  ' '  tracts ' '  are  designated  either  by  numbers 
or  by  fanciful  titles  and  are  subdivided  (on  paper)  into  residence  lots, 


LARGE   L.VNDHOLDINGS   IX    SOUTHERN    CALIFORNIA. 


11 


or  in  some  cases,  into  plots  of  an  area  of  from  1  to  5  acres.  Each  lot  or 
plot  is  separately  recorded  on  both  the  assessor's  and  tax  collector's 
books.  Sometimes  there  will  be  as  many  as  800  of  these  separate  parcels 
of  land  in  a  single  "tract." 

But  a  vast  deal  of  this  ' '  tract ' '  land,  in  spite  of  its  division  into  small 
parcels,  is  neither  urban  nor  suburban,  but  rural.  It  is  sparsely 
occupied,  and  may  be  so  for  years.  To  omit  it  from  consideration  in  a 
compilation  of  landholdings  would  be  to  leave  out  a  good  deal  of  the 
evidence  of  concentration  in  ownership.  In  several  of  these  "tracts" 
not  a  single  parcel  has  been  sold;  in  many  the  proportion  of  sold  to 
unsold  parcels  is  not  more  than  one-fifth  or  one-fourth.  Under  the 
i,'eneral  principle,  therefore,  that  unpopulated  or  thinly  populated  areas 
remote  from  the  center  of  the  city  are  to  be  regarded  as  rural,  in  spite 
of  their  designations,  much  of  this  "tract"  land  has  been  included  in 
these  tables.  Its  assessed  valuation  is  usually,  though  not  always,  con- 
siderably above  that  of  merely  agricultural  land;  but  much  of  it, 
while  waiting  purchase  and  residential  occupation,  is  now  used  for 
agriculture  and  may  continue  to  be  so  used  for  many  years. 

The  figures  of  large  holdings  in  the  eight  counties  are  as  follows : 

Holdings   in    Excess  of  2,000  Acres. 


County 


Santa  Barbara  . 

Ventura   

Los   Angeles  

Orange  

San  Diego   

Kivergide     

San   Bernardino 
Imperial    


Totals. 


Assessed  valuation 

No. 

Acres 

Land 

ImproTements 

84 

736,706 

¥6,681,205 

$575,290 

45 

225,467 

3,641,810 

233,000 

62 

512,169 

37,812,080 

975,150 

7 

199,272 

4,908,075 

307,325 

29 

428,824 

2,597,932 

61,895 

31 

967,145 

3,177,056 

322,5^ 

13 

1,371,705 

2,391,832 

234,005 

8 

452,627 

2,378,608. 

36,080 

279 

4,893,915 

$63,588,605 

$2,745,275 

Included  in  the  above  are  the  following : 

IHoldings  in   Excess  of  10,000  Acres. 


Santa  Barbara  . 

Ventura    

Los  Angelfs  

Orange    

San  Diego  

Riverside    

San  Bernardino 
Imperial    


Totals. 


County 


18 
4 
9 
4 
8 
9 
4 
1 

57 


494.448 
66,584 
324,941 
184,459 
337,084 
872,431 
1,330,157 
490,408 

4,040,512 


Larsest  bold- 
ings.  acres 


58,773 
24,395 
137,463 
101,000 
132,310 
690,951 
1,270,926 
391,050 

2,806,874 


]2 


COMMISSION    OF   IMMIGRATION    AND    HOUSING. 


The  Thirty-two  Largest  Holdings. 

(Exclusive  of  Railroad  Lands.) 


County 


Jerome  O'Neil  (Inc.  James  Flood) 

James   Irvine   

Empire  Land  and  Cattle  Company 

Newhall  Land  and  Farming  Company-- 

William   G.  Henshaw-. 

Santa  Crnz  Island  Company 

Vail  and  Vickers 

Banning  Brothers  

H.  and  W.  Pierce 

Jesus  Maria  Ranch  Company . 

Dibblee  Estate  Company 

Title  Insurance  Company 

Sisquoc  Investment   Company 

Hollister  Estate  Company.—— 

Appleton,  Land,  Water  and  Power  Co.-. 

T.  F.  Broome  et  al 

Santa  Monica  Mountain  Park  Company. 

E.  L.  Doheny 

L.  F.  Moulton-— 

San  Diego  Land  Corporation 

J.  C.  Cebrian 

Hobson  Brothers  

Martin  Bloom  &  Company 

Orena  Family 

Chino  Land  and  Water  Company 

RIndge  Corporation 

EI  Sobrante  Land  Company 

R.  T.  Buell 

People's  Trust  and  Savings  Bank ... 

E.  E.  Hendricks  Estate  Company 

Palos  Verdes  Syndicate..-- 

Jean  Cazaurang  


San  Diego  and  Orange .. j  183,399 

Orange    101,000 

Riverside 86,076 

Los  Angeles,  Ventura  and  Santa  Barbara...  67,180 

San  Diego  60,309 

Santa  Barbara 58,773 

Santa  Barbara  . 51,609 

Los  Angeles  -J  48,625 

Santa  Barbara 47,623 

Santa  Barbara  46,916 

Santa  Barbara 4.5,633 

Orange  and  Los  Angeles 39,611 

Santa  Barbara  .. 38,759 

Santa  Barbara 30,733 

San  Bernardino  29,539 

Ventura 24,395 

Los  Angeles  21,970 

Ventura  and  Santa  Barbara. 21,890 

Orange    ;  21,500 

San  Diego   !  20.921 

Sunta  Barbara '  18,826 

Ventura    18,200 

San  Diego - 18,081 

Santa  Barbara  17,635 

San  Bernardino  —  16,774 

Los  Angeles  16,294 

Riverside    16,225 

Santa  Barbara 16,167 

Riverside    16,128 

Riverside    - 16,060 

Los  Angeles 15,694 

San  Diego j  15,284 


PROPORTION  OF  LARGE  HOLDINGS  TO  TOTAL. 

It  is  important  to  compare  the  figures  for  "land  in  farms"  with  the 
figures  for  these  large  lioldings.  Since,  however,  the  railroad  grant 
lands  (except  the  small  portion  which  is  sold  under  contract  and  the 
title  to  which  is  retained  by  the  railroad  company  until  the  receipt  of 
final  payments)  are  not  included  in  the  census  figures  of  "land  in 
farms,"  they  must,  for  this  purpose,  be  excluded  from  the  figures  of 
the  large  holdings.  Subtracting  the  2,598,775  acres  of  railroad  lands 
leaves  a  remainder  of  2,295,140  acres  in  holdings  of  more  than  2,000 
acres  each,  out  of  a  total  of  4,587,581  acres  of  "land  in  farms,"  or  50 
per  cent.  It  will  be  seen  from  the  subjoined  table  that  in  Santa  Bar- 
bara County  the  percentage  reaches  65.7.  In  Imperial  County,  on  the 
other  hand,  the  percentage  is  only  9.9.  The  great  increase  of  acreage 
in  farms  in  this  county  since  1910  and  the  tendency  toward  ever  smaller 
farm  units  lias  greatly  decreased  even  this  low  percentage.     In  this 


LARGE   LANOmH.DlNGS    i.N    SOUTHERN    CALIFORNIA.  13 

respect,  as  in  many  others.  Imperial  County  is  unique  among  California 
eounties.     The  figrures  follow: 


r.„^i„r.,^.  Holdings.  2.000  »..«.„♦ 

r^iinf.                                              i   ^"**  "*  famw,  ^^J     ^  Per  cent 

'-^•'''''                                                           '              aprps  acreo  aiiu  -  total 

»*^'^'          !  more,  acres  ""  """' 

Santa    Barbara    1,120,473  736,706  65.7 

Ventura 550,199  225,467  40.9 

I,o.<!  Angeles - 757,985  374,706  ,               49.4 

orange    371,692  199,272  '               53.6 

San  Diego - - 834,426  |  359.797  43.1 

Riverside 520,806  276,194  53.0 

San  Bernardino  208,396  100,779  48.3 

Imperial 223,602  22,219  9.9 


Totals I  4,587,581  2,295,140  50.0 


EXTENT  OF  CONCENTRATION  OF  OWNERSHIP. 

The  usage  of  the  census  term  "land  in  farms"  has  already  been  , 
explained.  The  figures  here  given  show  that  274  individuals,  firms  or 
corporations  own  more  than  half  of  all  the  nonpublic  rural  land 
(excludinf;  the  Southern  Pacific  lands)  in  the  eight  counties  studied. 
The  net  figures  are  even  less  than  this,  since  in  a  number  of  cases  the 
name  of  a  large  landholder  in  one  county  appears  on  the  records  also  of 
anotlier  county.  Other  duplications  occur,  as  in  the  ease  where  a  man 
owns  land  in  hi.s  own  name  in  one  county,  and  in  another  county  in  the 
name  of  a  company.  It  may  thus  be  said  that  title  to  one-half  of  the 
nonrailroad  and  nonpublic  rural  land  of  the  eight  counties  is  vested  in 
r.ot  more  than  250  owners.  If  the  family,  rather  than  the  individual, 
is  to  be  considered  the  economic  unit,  then  a  further  degree  of  concen- 
tration of  ownership  might  be  shown.  A  few  cases  have  been  listed  of 
a  closely  related  family  whose  ownership  is  in  great  part  jointly  held, 
as  a  single  owner.  But  there  are  a  number  of  other  cases  wherein  the 
records  reveal  large  independent  holdings  in  the  names  of  various  mem- 
Ijers  of  a  family.  A  study  of  family  relationships  among  landowners 
;ind  a  computation  of  ownership  by  family  units  would  bear  interesting 
results.  In  all  the  counties  there  are  numbers  of  tracts  of  from  600 
to  2,000  acres.  A  family-unit  computation  would  show  greater  con- 
centration by,  on  the  one  hand,  reducing  the  number  of  owners  accord- 
ing to  the  schedules  employed,  and  on  the  other  "hand,  by  combining 
many  of  these  lesser  tracts  and  thus  leaving  even  a  smaller  proportion 
{.f  the  total  area  owned  in  small  individual  holdings. 

CHARACTER  OF  THE  LARGE  HOLDINGS. 

Outside  of  Imperial  County,  which  has  l)een  settled  only  since  1900, 
the  large  holdings  are,  in  the  main,  an  inheritance  from  Spanish- 
Mexican  times.     Though  many  of  the  enormous  land  grants  have  been 


14  COMMISSION    OP    IMMIGRATION    AND    HOUSING. 

divided  or  reduced  in  size,  there  are  few  that  have  been  broken  up  into 
small  holdings.  In  some  eases  they  remain  virtually  intact;  in  some 
cases  two  or  more  have  been  Joined  into  one  immense  holding ;  in  most 
cases  the  major  part  of  each  of  these  grants  is  today  a  large  holding  in 
the  possession  of  an  individual,  a  family  or  a  corporation. 

The  San  Diego  portion  of  the  great  Santa  Margarita  ranch  is  today, 
with  the  exception  of  about  one  thousand  acres  taken  for  thoroughfares, 
of  the  same  area  as  it  was  in  Mexican  days.  This  ranch — generally  sup- 
I)osed  to  contain  260,000  acres — has  132,310  acres  in  San  Diego  County 
and  51,089  acres  in  Orange  County,  a  total  of  183,399  acres.  The 
Orange  County  portion  was  reduced  by  10,870  acres,  years  ago,  when 
the  remainder  passed  from  the  Pico  family  to  the  father  of  Jerome 
O'Neil,  one  of  the  present  owners,  Init  it  has  suffered  no  subsequent 
reduction.  The  10,870  acres  also  remain  a  single  holding.  The  Irvine 
ranch,  of  101,000  acres,  in  Orange  County,  was  formed,  through  the 
consolidation  of  several  Spanish-Mexican  grants,  into  one  holding  by 
the  father  of  the  present  oAvner.  In  its  consolidated  form  it  contained 
108,000  acres.  Some  years  ago  a  tract  of  7,000  acres  was  cut  off  and 
sold,  but  since  that  time  the  boundaries  have  not  been  altered.  The 
famous  ]\Ialibu  ranch,  which  is  owned  by  the  Rindge  family  and  which 
lies  along  the  seashore  north  and  west  of  Santa  ]Monicn,  in  Los  Angeles 
(Jounty.  comprises  the  original  13.316  acres  of  a  Spanish-Mexican  grant, 
with  2,978  acres  that  have  been  added  by  the  present  owners. 

These  are  but  a  few  of  the  more  conspicuous  examples  of  large  areas 
held  virtually  intact  from  ^Mexican  days  to  the  present  time.  In  other 
cases  boundaries  have  been  shifted,  a  large  holding  has  been  broken 
into  two  or  three  holdings,  a  tract  has  been  cut  off  from  one  holding 
and  added  to  another.  But.  as  said  1>efore,  the  dominant  form  of  the 
large  holding  is  the  tract  which  has  held  the  greater  part  of  its  bound- 
aries undisturbed  from  Mexican  times. 

Nevertheless,  there  has  been  enough  "loose  land" — fragments 
broken  off  from  the  original  estates  and  lesser  independent  areas — to 
furnish  not  only  most  of  tlie  small  holdings  but  also  new  consolidations 
into  large  holdings.  In  modern  times  there  has  been  both  concentration 
and  division,  each  on  a  considerable  scale.  Imperial  County,  that  sec- 
tion unique  among  California  counties,  shows  but  seven  consolidations 
into  areas  of  more  than  2,000  acres  each,  the  largest  of  these  being  only 
5,917  acres,  while  on  the  other  hand  tlie  average  size  of  the  farm  holding 
has  steadily  diminished,  lint  in  the  other  counties,  though  near  the 
cities  the  demand  for  homes  and  small  holdings  has  resulted  in  the 
breaking  up,  partial  or  entire,  of  a  number  of  old  estates,  great  wealth 
has  contrived  to  "lay  iield  to  tield"  in  the  making  of  new  consolida- 
tions of  extensive  areas.  To  the  fact  of  the  persistence  of  many  of  the 
old  estates  nuist  be  added  the  fact  of  the  creation  of  many  new  ones, 


TiARGE   LANDllOl.DlKGS   IN    SOITIIKUK    CALIFORNIA.  15 

Santa  Barbara  County  shows  tho  jjreatost  (1«'KI"<h-  of  persistence  of  the 
old  estates;  Los  Augeles  County  the  greatest  clej?ree  botli  of  dismeni- 
herment  and  of  reeousolidation. 

From  the  social  standpoint— tlie  standpoint  of  the  motive  of  the 
ovvnei-s  for  possession,  of  the  beneficial  use  of  the  land  and  of  the  con- 
duet  of  activities  on  or  regarding  the  land — these  large  holdings  show 
a  wide  range  of  character.  Some  tracts,  of  which  the  holding  of  the 
OrcHa  family  in  Santa  Barbara  County  is  perhaps  typical — are  the 
ancestral  inheritance  of  the  old  California  families.  On  the  assessor's 
books  against  each  of  the  family  heads  is  assessed  "the  undivided  one- 
fifth"  or  "the  undivided  one-eighth"  fl»f  many  parcels  of  land  which 
together  make  a  great  area.  Some  of  the  land  is  cultivated,  but  not  to 
the  best  advantage,  and  the  estate  is  held  together  through  family 
sentiment.  Another  extensive  holding,  like  that  of  the  Rindge  family, 
in  Los  Angeles  County,  represents  an  American  succession  to  a  Spanish- 
Mexican  ownership  and  the  establishment  of  a  manorial  estate.  This 
instance  is,  however,  extreme;  it  is  the  instance  of  a  little  principality, 
defiant  of  the  law  and  of  public  sentiment,  determined  to  live  its  inde- 
})endent  life  regardless  of  the  demands  and  the  interests  of  a  society 
with  which  it  is  in  perpetual  discord.  Its  conflict  with  the  outside 
world  is  an  ever-recurring  issue  in  the  courts.  It  holds  to  its  land, 
of  which  it  makes  small  use,  merely  through  an  obstinate  pride  of 
possession. 

There  is  the  highly  centralized  company  which  carries  on  farming 
operations  by  modern  methods.  Sometimes  it  is  overcapitalized  and 
oversystematized,  and  its  operations  are  carried  on  at  a  loss,  as  was  the 
case  of  the  Timken  Ranch  Company,  of  Imperial  County,  w'hose  absentee 
owner,  a  wealthy  manufacturer,  has  finally  decided  to  partition  his 
holdings.  In  other  cases,  as  in  the  instance  of  the  T.  B.  Bishop  Com- 
pany, of  Santa  Barbara  County,  it  is  conducted  under  practical  and 
ctiicient  methods  at  a  profit. 

There  is  the  tract  given  up  almost  wholly  to  stock  raising,  as  in  the 
case  of  the  Mendenhall  Cattle  Company,  of  San  Diego  County;  the 
tract  offered  for  partition  and  sale,  but  in  the  meantime  carried  on  as 
a  farming  enterprise,  as  in  the  case  of  the  Patterson  Ranch  Company, 
of  Ventura  County;  the  tract  bought  solely  for  subdivision  and  sale, 
without  development  other  than  of  water  resources,  as  in  the  cases  of 
numerous  holdings  in  San  Bernardino,  Riverside  and  Los  Angeles 
counties;  and  the  tract  developed  by  the  planting  of  fruit  or  nut  trees 
and  thereupon  offered  for  sale  in  small  parcels,  as  in  Orange  and  River- 
side counties.  There  is  the  case  of  the  large  tract,  of  which  the  Irvine 
ranch,  in  Orange  County,  is  the  most  conspicuous,  on  which  only  minor 
farming  operations  are  carried  on  bj'  the  owner,  the  greater  part  of  the 


IG  COMMISSION    OF   IMMIGRATION    AND    HOUSING. 

agricultural  land  beiiiu'  leased  out  under  rigid  i-estrietions  to  tenants. 
P'inally.  there  is  the  cumulative  holding — that  of  the  banks,  the  trust 
companies  and  the  land  speculators — made  up  of  many  scattered  tracts. 

TILLABLE  SOIL  IN  THE  LARGE  HOLDINGS. 

It  is  essential  to  obtain  some  approximation  of  the  proportion  of 
tillable  soil  in  the  large  holdings.  Obviously,  if  these  holdings  contain 
little  more  than  grazing  or  waste  land  or  land  which  can  not  be  dry 
farmed  and  which  is  without  an  actual  or  potential  water  supply,  they 
are  unsuited  to  partition  into  small  holdings.  But  the  attempt  to 
arrive  at  even  approximations  of  the  amount  of  tillable  soil  is  met  by 
many  difficulties.  These  holdings  include  every  kind  of  soil — the  best 
and  the  Avorst  and  every  intermediate  grade — and  opinions  as  to  the 
character  and  utility  of  the  various  areas  differ  absurdly.  The  State 
Tax  Commission,  in  its  report,  published  in  1917,  recommended  a  thor- 
ough study  by  experts  of  the  agricultural  lands  of  the  state  and  a 
classification  of  their  character  and  suitability  for  various  crops.  The 
value  of  such  a  study  is  evident  enough;  but  there  is  small  likelihood 
of  its  being  ?indertaken  in  the  near  future.  In  the  meantime  guesswork 
must  take  the  place  of  science  and  for  lack  of  a  definite  determination 
fix  upon  some  sort  of  estimate. 

The  term  "tillable"  is  itself  variously  understood.  It  is  obvious  that 
land,  no  matter  how  "agricultural"  in  composition,  is  not  tillable  unless 
it  can  be  supplied  with  water  or  unless  it  lies  in  such  favorable  location 
that  it  can  be  dry-farmed.  But  the  quantity  of  water  needed  is  a 
matter  of  endless  dispute;  and  what  one  finds  ample  another  finds 
inadequate.  General  farming  methods,  moreover,  are  a  determining 
factor.  A  proper  alternation  of  crop  and  fallow,  a  proper  apportion- 
ment of  tillage  to  grazing,  work  wonders  on  one  tract  while  an  adjoin- 
ing one  lies  idle  and  profitless.  Individual  faculty  also  enters  into  the 
determination.  In  Ventura  and  Santa  Barbara  counties  hillsides  and 
river  washes  appear  untillable  to  an  American  but  tillable  to  a  Portu- 
guese. Finally,  the  potential  water  supply  itself,  even  if  means  were 
at  hand  for  its  development,  is  often  a  matter  of  conjecture;  and 
unless  this  factor  can  be  given  in  set  terms  a  judgment  as  to  the  ulti- 
mate usefulness  of  a  certain  area  can  be  no  more  than  a  haphazard 
guess. 

For  the  tillable  proportion  of  each  section  of  each  of  these  counties 
the  Commission  has  sought  to  get  the  trained  judgment  of  practical 
men.  In  the  expert  estimate  made  for  the  Commission,  tract  by  tract, 
of  the  large  holdings  in  Ventura  County,  the  total  acreage  of  tillable 
land  reaches  only  33,400  acres  out  of  225,467  acres,  or  14.8  per  cent. 
The  estimates  were  made  on  a  much  narrower  understanding  of  the 


LARGE   LANDHOLDINGS   IX    SOUTHERN    CALIFORNIA.  17 

term  than  tliat  employ od  by  the  Conservation  Commission.  In  one  of 
these  tracts,  which  for  several  years  has  been  advertised  as  excellent 
farming'  land  for  sale  in  parcels  of  any  size,  and  which  carries  an 
average  assessment  of  $70  an  acre  (equivalent,  according  to  the  State 
Tax  Commission's  rating,  to  a  market  value  of  $168  an  acre),  the  pro- 
portion of  .tillable  soil  is  given  as  less  than  one-third  of  the  total.  Even 
on  a  tract  which  is  operated,  supposedly  at  a  profit,  as  a  lemon  grove, 
and  which  carries  an  average  assessment  of  $95  an  acre  (equivalent  to 
a  market  value  of  $228  an  acre),  the  proportion  given  of  tillable  land 
Ls  only  70  per  cent.     These  figures  make  a  proportion  extremely  low. 

For  various  reasons  it  seems  necessary  to  give  a  slightly  lower 
proportion  of  tillable  land  to  the  Santa  Barbara  holdings  than  to  those 
of  Ventura ;  and  if  14.8  per  cent  is  to  be  taken  as  Ventura's  proportion, 
that  of  Santa  Barbara  can  hardly  be  more  than  12  per  cent. 

The  large  holdings  of  Orange  County  include  not  less  than  65,000 
acres  of  tillable  land,  out  of  199,272  acres,  or  32.6  per  cent. 

In  Los  Angeles  County  south  of  the  Sierra  jNIadre  Mountains,  except 
for  the  Hollywood  and  Santa  Monica  mountains  and  the  Palos  Verdes 
Hills,  virtually  all  the  land  is  tillable  and  most  of  it  exceedingly  fertile. 
There  are  some  extensive  river  washes  (particlarly  those  of  the  San 
Gabriel  and  the  Tujunga)  which  reduce  this  tillable  area,  but  they  are 
inconsiderable  in  comparison  with  the  total.  Their  extent,  moreover,  may 
be  somewhat  diminished  by  the  efforts  toward  flood  control,  now  under 
way.  There  is  an  extreme  variation  in  the  assessed  valuation  of  these 
lands,  but  it  is  predominantly  due  to  their  nearness  or  remoteness  from 
the  urban  centers.  The  disparities  due  to  differences  in  the  character 
of  the  land  (other  than  in  the  exceptions  noted)  are  minor.  Portions 
of  these  lands,  located  within  the  area  of  prospective  development  of 
Los  Angeles,  are  assessed  at  a  figure  which  represents  a  presumed 
market  value  of  $2,500  an  acre,  while  other  lands  quite  as  good  for 
agriculture,  but  remoter  from  the  city,  are  assessed  on  a  presumed 
market  value  of  less  than  $300  an  acre. 

The  question  of  the  agricultural  value  of  the  lands  north  of  the 
Sierra  Madre  Mountains  (mainly  Antelope  Valley)  is  a  controverted 
one.  Some  years  ago  the  most  extravagant  predictions  were  made 
regarding  the  future  of  this  region,  and  thousands  of  settlers  were 
induced  to  buy  lands.  Prices  rose  to  bonanza  figures,  and  fortunes 
were  made  by  speculators.  The  general  results  of  settlement,  however, 
have  been  disheartening;  and  unless  the  water  supply  can  be  greatly 
increased  the  rate  of  development  must  be  slow. 

There  are  48,162  acres  of  land  on  Santa  Catalina  Island  assessed  to 
the  Santa  Catalina  Island  Company  (Banning  Brothers).  Part  of 
this  land  is  used  for  grazing,  and  part  is  mere  waste.  It  is  unlikely 
that  more  than  1,500  acres  of  it  are  tillable. 


18  COMMISSION    OP   IMMIGRATION    AND    HOUSING. 

Ill  all  these  large  holdiiig.s  it  seems  Hkely  that  some  2(36,000  acres 
may  be  regarded  as  tillable,  of  whieli  50,000  belong  to  the  Southern 
Pacifie   Company. 

In  San  Bernardino  County  the  large  holdings  comprise  an  enormous 
area  of  railroad  land,  most  of  which  is  worthless  for  any  purpose. 
But  the  greater  part  of  the  22,886  acres  sold  under  contract  to  settlers 
and  others  may  fairly  be  regarded  as  tillable;  and  assuredly  the  2,517 
acres  offered  for  sale  at  from  $22.50  to  $100  per  acre  may  be  so 
regarded.  Of  the  12  large  holdings  of  nonrailroad  land  60  per  cent 
is  estimated  to  be  tillable. 

Riverside  County  has  also  an  enormous  area  of  railroad  land,  much 
of  which  is  irreclaimable  desert.  But  the  17,830  acres  offered  for  sale 
at  prices  of  $22.50  and  better,  and  perhaps  70  per  cent  of  the  68,849 
acres  sold  under  contract  to  settlers  and  others  may  be  included  in  the 
tillable  class.  The  other  large  holdings  in  the  county  include  much 
grazing  and  waste  land,  but  also  large  areas  of  the  richest  citrus  and 
general  farming  land.  Many  of  these  tracts  run  100  per  cent  tillable. 
The  total  for  the  nonrailroad  lands  can  not  be  less  than  40  per  cent. 

No  part  of  the  69,027  acres  of  Southern  Pacific  land  in  San  Diego 
County  is  included  in  that  company's  price  list.  This  land  is  assessed 
at  an  average  valuation  of  $1.50  an  acre.  The  extension  of  irrigation 
from  the  Colorado  River  will  probably  render  12,000  acres  tillable. 
The  Atchison,  Topeka  and  Santa  Fe  holdings  of  8,752  acres  are  not 
grant  lands  but  an  old  Spanish-Mexican  ranch  which  is  operated  as 
a  farming  enterprise.  Of  the  359,797  acres  in  the  28  holdings  apart 
from  the  Southern  Pacific  lands,  it  is  probable  that  20  per  cent  is  till- 
able. But  estimates  are  here  more  than  elsewhere  unreliable  by  reason 
of  the  conflict  of  opinion  regarding  the  potential  water  supply.  There 
is  good  rainfall  in  the  mountains,  but  the  soil  drinks  up  much  of  it, 
and  the  run-off  is  comparatively  light.  Even  this  run-oft'  has  not  been 
properly  conserved,  and  the  county  is  far  behind  other  counties  in 
the  development  of  its  water  resources.  Estimates  of  the  amount  of 
tillable  land  therefore  differ  not  only  by  reason  of  the  variance  of 
opinion  regarding  soils  but  by  reason  also  of  the  variance  of  opinion 
regarding  the  potential  supply  of  water.  An  estimate  of  20  per  cent 
for  the  tillable  lands  in  these  holdings  anticipates  a  considerable  increase 
of  the  available  water  supply. 

In  Imperial  County  the  22,219  acres  in  the  large  holdings  of  non- 
railroad lands  are  all  tillable.  Of  the  Southern  Pacific  holdings  all  of 
the  39,352  acres  in  the  control  of  the  Imperial  Valley  Farm  Lands 
Association  are  tillable.  So,  also,  are  2,272  acres  offered  for  sale  by 
the  company  at  from  $50  to  $90  an  acre.  Through  the  new  project  of 
an  all-Ameriean  canal  a  great  area  along  the  railroad  from  Niland  to 


LARGE   LANDHOIiDINGS    IX    SOUTHERN    CALIFORNIA. 


19 


Salton  and  around  the  western  extremity  of  the  Salton  Sea  will  be 
added  to  the  tillable  class,  and  it  is  probable  that  30,000  acres  of  railroad 
lands  in  this  section  will  be  benefited.  The  remainder  of  the  railroad 
lands,  thousands  of  acres  of  which  are  assessed  at  $25  a  square  mile, 
or  3.9  cents  an  acre,  are  outside  the  pale  of  agriculture. 

A.rranged  in  tabular  form,  the  figures  follow.  It  is  to  be  said  of 
tlieni,  first,  that  they  are  suggestive  rather  than  strietlv  informative, 
ar)d,  second,  that  they  are  "conservative."  It  is  probable  that  they 
represent  a  norm  between  such  estimates  as  might  be  made  by  one  who 
believes  in  the  certainty  of  a  vast  extension  of  horticulture  and  agri- 
culture in  southern  California  and  one  who  believas  that  the  margin 
of  cultivation  has  already  nearly  reached  the  limits  of  the  water  supply. 


County 


Total  in  large 
holdings. 


Tillable  in 

large  holdings, 

acres 


TlUable, 
percent 


Santa  Barbara  736,706 

Ventura    ...- 225,467 

Los  Angeles- 
Southern   Pacific  lands - - 137,463 

Other  holdings  — -  374,706 

Orange    119,272 

San  Diego- 
Southern   Pacific  lands 69,027 

Other    holdings - 359,797 

San  Bernardino— 

Southern   Pacific   lands 1,270,926 

other    holdings    - 100,799 

Riverside — 

Southern    Pacific   lands 690,951 

other   holdings 276,194 

Imperial- 
Southern  Pacific  lands 430,408 

other   holdings   - 22,219 

Totals 4,893,915 

Kxclusive  of  Southern  Pacific  lands 2,295,140 


88,404 
33,400 

50,000 
216,826 
65,000 

12,000 
71,960 

22,500 
58,599 

69,100 
110,478 

71,624 
22,219 


12.0 
14.8 

36.4 
58.0 
32.6 

17.3 
20.0 

1.8 

58.1 

10.0 
40.0 

16.6 

100.0 


892,110 
666,886 


18.2 
29.0 


PRICES  AND  VALUES   OF  LAND. 

The  feeling  is  general  that  all  California  land  is  priced  far  above  its 
productive  value.  Both  the  climate  of  California  and  the  optimism,  or 
whatever  it  may  be  called,  of  its  land  speculators  are  capitalized  and 
form  a  large  element  of  the  price.  Figures  collected  by  the  Commission 
of  Land  Colonization  and  Rural  Credits  and  published  in  its  report 
(1916)  show  that  the  average  price  paid  by  settlers  in  the  various 
colony  schemes  promoted  throughout  the  state  was,  according  to  settlers* 
statements,  $190.72,  and,  according  to  commercial  bodies'  statements, 
$260.97  per  acre.  Though  there  is  no  po.ssibility  of  harmonizing  figures 
so  greatly  at  variance,  it  is  enough  to  show  that  the  minimum  given  is 
the  exceedingly  high  price  of  $190.72.  The  Department  of  Agricul- 
ture's figures  for  the  average  price  of  unimproved  farm  land  in  Cali- 
fornia for  the  year  1916  were  $110,  as  against  $74.95  for  the  north 


20  COMMISSION    OF   IMMIGRATION    AND    HOUSING. 

central  section  east  of  the  Mississippi.  $59.68  for  the  north  central 
section  west  of  the  Mississippi  and  $58.40  for  the  far  western  section. 
For  improved  land  the  California  average  ($180)  was  80  per  cent 
above  that  of  the  section  showing  the  next  highest  price. 

The  approximation  of  price  to  productive  value  is  closest  in  Imperial 
County,  where  the  climate  (particularly  that  of  summer)  is  assuredly 
not  susceptible  to  capitalization.  This  approximation  is  most  remote 
.in  the  vicinity  of  Los  Angeles,  where  climate,  optimism  and  proximity 
to  a  populous  center  are  all  capitalized  and  fused  into  the  price.  In 
Ventura  County  the  recent  enormous  rise  in  the  market  price  of  lima 
beans  might  have  been  expected  to  lessen  the  gap  between  the  price 
and  the  productive  value  of  the  land;  but  with  each  leap  in  the  price 
of  beans  the  price  of  land  has  taken  a  corresponding  advance.  One 
may  hear  on  good  authority,  in  that  county,  of  an  owner  refusing  $1,000 
an  acre  for  the  best  bean  land.  In  San  Diego  County  it  is  a  common 
saying  that  no  farmer  can  possibly  pay  5  per  cent  interest  on  deferred 
payments  on  the  market  price  of  local  farm  land  and  make  a  living. 
In  every  southern  county  the  seeker  of  farm  land  is  confronted  with 
prices  which  he  knows,  if  he  pays  them,  involve  grave  risk  to  himself 
in  the  attempt  to  get  commensurate  results  from  the  soil.  When  he 
pays  these  prices  he  does  so  because  for  other  than  strictly  economic 
reasons  he  has  fixed  upon  some  particular  locality  for  his  home  and  he 
is  willing  to  take  the  gambler's  chance  with  a  dubious  investment. 

PRICES  OF  SOUTHERN  PACIFIC  LANDS. 

The  considerable  body  of  land  owned  by  the  Southern  Pacific  Land 
Company  may  be  treated  first.  Most  of  this  is  anything  but  agricul- 
tural land.  Great  areas  of  it  are  not  even  grazing  land.  But  in  the 
Imperial  Valley,  about  Calipatria ;  in  the  Coachella  Valley,  in  the  neigh- 
borhood of  Indio,  Thermal,  Coachella  and  Mecca;  in  the  San  Jacinto 
region ;  in  the  region  of  San  Bernardino,  and  in  the  Antelope  Valley, 
about  Palmdale  and  Lancaster,  are  tracts  of  fertile  land  with  either  an 
available  or  a  potential  water  supply. 

The  area  of  these  lands,  with  their  assessed  valuation,  both  in  the 
aggregate  and  by  acre,  is  shown  in  the  following  table.  With  two 
exceptions,  one  in  Imperial  County  and  one  in  Los  Angeles  County, 
carrying  the  trifling  valuation  of  $200  each,  these  lands  are  wholly 
without  improvements : 


LARGE   LANDHOLDINGS  IN   SOUTHERN    CALIFORNIA. 


21 


CouDtr 


Assessed  raluation 


San  Bernardino- 
Patented    — 

Unpatented    

Totals 

Riverside- 
Patented    — 

Unpatented     

Totals 

Imperial- 
Land  Company 

Furm  Lands  Association- 
Totals. 

Los  Angeles- 
Patented    

San  Diego— 
Patented    

Grand  total 


971,624 
299,302 

1837,901  1 
94.200  ' 

10  86 
32 

1,270,926 

$932,101 

$0  73 

341,723 
349,228 

1589,392 
54,880 

$1  72 
16 

690,951 

$644,272  1 

10  93 

391,056 
39,352 

$561,813  1 
1,133,210 

$1  41 
28  79 

430,406 

$1,695,023  i 

$3  94 

137,463 

$967,680 

$7  04 

69,027 

$103,630 

$1  GO 

2,598,775 

$3,342,706  I 

$1  29 

The  land  company  prints  a  price  list  of  certain  of  its  lands,  and  a 
copy  is  sent  to  each  assessor  in  counties  wherein  the  company  owns  land. 
The  total  area  thus  listed  for  sale  is  only  305,116  acres,  or  about  one- 
eighth  of  the  company's  entire  holdings  in  these  counties.  The  lands 
not  listed  for  sale  are  presumably  of  little  or  no  market  value  at  this 
time.  From  this  price-list  has  been  computed  the  following  classification 
of  areas  and  prices: 


$1.50  to  $5 

$5.25  to  $10... 
$11.00  to  $20.. 
$22.50  to  $40.- 
$42.50  to  $75.. 
$75.00  to  $100. 
Above  $100  -. 


Totals. 


Los  Angeles, 
,      acres 


5,441 

4,488 

14,974 

20,588 

1.878 


47,364 


Blverside. 
acres 


19,335 
16,341 
11,143 
4,919 
1.768 


San  Bernar- 
dino, acres 


82,923 

44,371 

3.628 

1,799 

718 


ImperUl, 
acres 


2,072 
140 


122,199 


133,341 


2,212 


Total 
acres 


157.067 

68.191 

34,843 

33,530 

9,682 

1,908 

2 


305,116 


'Includes  325  acres  In  Orange  County  and  1,121  acres  partly  In  Orange  County. 

OTHER  LANDS. 

Quotations  on  the  price  of  farm  lands  are  notoriously  undependable. 
Except  in  the  cases  of  land  companies  issuing  printed  lists  of  prices 
for  specific  areas,  the  price  of  land  is  usually  subject  to  the  "higgling 
of  the  market,"  to  a  give-and-take  bargaining  bet  .vcn  buyer  and  seller. 


^^ 


22  COMMISSION    OP   IMMIGRATION    AND    HOUSING. 


The  local  tendency  to  inflate  values  and  prices  for  the  benefit  of  the 
outside  world  is  everywhere  evident ;  and  the  visitor  is  regaled  with 
exaggerations  which  he  may  easily  be  led  into  believing  to  be  facts. 

The  assessment  rolls  furnish  only  a  basis  for  computing  current  land 
prices.  They  are  not  always  indicative  in  the  matter  of  real  values, 
since  good  tillable  land  may  be  used  for  stock  raising  and  therefore 
assessed  merely  as  grazing  land,  or  a  tract  on  which  the  best  orang&s 
could  be  grown  may  be  given  up  to  alfalfa  and  officially  valued  accord- 
ingly. But  as  to  current  prices,  if  a  definite  ratio  between  assessed 
valuation  and  local  opinion  can  be  determined,  the  assessment  rolls 
ought  to  reveal  a  reasonable  approximation  to  the  sums  for  which  men 
are  willing,  if  at  all,  to  dispose  of  their  lands.  If  assessments  were 
uniformly  made  on  separate  parcels  of  homogeneous  land  the  result 
would  afford  even  a  view  of  the  gradation  of  prices.  Unfortunately, 
the  assessments,  as  a  rule,  are  not  made  in  this  way.  A  parcel  of  land, 
or  even  an  entire  holding,  will  be  assessed  as  a  whole,  even  though  it 
contains  everything  from  $2  to  $250  land.  The  resultant  average 
therefore  gives  no  key  to  the  valuations  of  particular  kinds  of  land. 

In  1916  the  State  Tax  Commission  made  appraisements  in  38  of  the 
principal  counties  of  the  state  in  order  to  determine  the  ratio  between 
assessed  value  and  what  it  calls  ''real  value."  The  latter  term  will  be 
iLsed  herein,  without  an  inquiry  into  its  validity,  in  the  sense  in  which 
it  was  used  by  the  Tax  Commission.  The  appraisements  made  by  the 
Tax  Commission,  when  compared  with  assessments  made  by  the  local 
assessors,  showed  the  ratio  for  "outside"  acreage  expressed  in  the 
following  percentages : 


County 


Santa  Barbara 

Ventura  - 

T.os  Angeles  

Orange  

San   Diego   

Riverside 

San   Bernardino 
Imperial    


Per  cent 


41.39 
41.52 
52.26 
27.29 
24.89 
28.45 
33.37 
35.84 


It  has  been  assumed  that  the  appraisements  were  sufficiently  varied 
to  give  a  representative  result  for  general  farm  lands.  The  ratios  would 
not,  however,  fit  the  case  of  the  railroad  lands.  These  are  uniformly 
assessed  in  San  Bernardino.  Riverside  and  Imperial  counties  at  one-third 
their  estimated  value.  Though  as  for  San  Bernardino  County  this  ratio 
almost  exactly  accords  with  the  Tax  Commission's  figure,  in  Riverside 
County  the  actual  ratio  is  con.siderably  higher,  while  in  Imperial  County 
it  is  somewhat  lower. 


LARGE   LAKDIlOl.DlNGS    IX    SOUTHERN    CALIFORNIA.  23 

In  the  foUowincf  parao:raphs  a  view  of  farm  land  prices  is  sought 
lo  be  given  by  apph-ing  the  Tax  Commission's  ratio  to  the  assessments 
on  particular  parcels  of  good  land  listed  in  the  tax  collector's  books  of 
tlie  various  counties.  In  certain  cases  these  results  have  been  compared 
^vith  local  quotations  of  farm  land  prices.  In  all  cases  the  prices  and 
assessements  upon  the  land  itself  have  been  dealt  with  independent  of 
improvements. 

In  Santa  Barbara  County  the  liighest  assessed  valuation  is  that  of 
the  Hartnell  Estate  Company.  2,520  acres,  which  at  the  ratio  given 
would  show  an  average  ''real  value"  per  acre  of  $162.74.  The  next 
highest  is  that  of  the  main  section  (2,161  acres)  of  the  Pacific  Improve- 
ment Company's  holding,  $121.17;  the  third  that  of  John  F.  More, 
2,115  acres,  $118.63.  and  the  fourth  that  of  a  parcel  (1,423  acres)  of 
the  holdings  of  the  well-conducted  farming  enterprise,  the  T.  B.  Bishop 
Company,  $92.48.  The  assessed  valuations  in  these  cases  are  far  above 
the  general  run  of  valuations  in  this  county,  and  the  "real  values"  they 
yield  by  application  of  the  ratio  seem  much  lower  than  are  warranted 
by  current  quotations  of  farm  land  prices. 

In  Ventura  County  the  highest  assessed  valuation  is  that  of  the  D. 
McGrath  Estate  Company,  2,266  acres,  which  by  the  application  of  the 
ratio  yields  a  "real  value"  of  $252.55  per  acre.  The  next  highest  is 
that  of  the  Limoneira  Company,  a  highly  developed  lemon-growing 
fnterprise,  2,870  acres,  $228.49;  the  next  that  of  the  Patterson  Ranch 
Company,  9,139  acres,  $165.76.  The  Berylwood  Investment  Company 
has  9,172  acres  which  show  a  computed  "real  value"  of  $130  per  acre, 
and  D.  T.  Perkins,  3.250  acres,  $101.51.  An  obvious  inference  from 
these  figures  is  that  when  tracts  as  extensive  as  9,000  acres  run  an 
average  value  of  $165  or  even  $130  throughout,  there  must  be  some- 
where therein  some  exceedingly  high-priced  land;  and  the  story  of  one 
of  these  owners  (McGrath)  refusing  $1,000  an  acre  for  best  bean  land 
may  have  a  substantial  basis  of  fact. 

Los  Angeles  County,  according  to  the  Tax  Commission,  has  the  highest 
ratio  of  assessed  valuation  to  "real  value"  of  any  of  the  southern 
counties.  It  has  also  by  far  the  highest  values,  a&  Expressed  in  prices. 
For  areas  south  of  the  mountains  and  west  of,  let  us  say,  Pomona,  no 
proper  demarcation  can  be  made  between  lands  which  have  solely  an 
agricultural  value  and  those  wherein  prospective  urban  value  enters 
to  a  greater  or  less  extent.  The  San  Marino  ranch,  811  acres,  of  the 
Huntington  Land  and  Improvement  Company,  is  assessed  at  $1,215  an 
acre,  a  figure  which  yields  a  computed  "real  value"  of  $2,324.91. 
A  tract  of  101  acres  belonging  to  Anita  M.  Baldwin  indicates  a  "real 
value"  of  $1,420  per  acre.  Five  hundred  acres  of  the  Dominguez 
Estate  Conip;<ny  yield  tlie  fignre  of  $478  per  acre.     The  Laguna  Land 


24  COMMISSION    OF   IMMIGRATION    AND    HOUSING. 

Company,  with  about  2,800  acres  to  the  southeast  of  Los  Angeles  proper, 
and  in  the  direct  line  of  anticipated  urban  development,  has  several 
tracts  which  assay  values  of  from  $750  to  $922.  These  figures,  the 
result  of  the  application  of  the  Tax  Commission's  ratio,  are  extremely 
low  if  by  "real  value"  the  Tax  Commission  means  current  market  price; 
for  the  $922  land  has  been  subdivided  and  is  for  sale  to  the  "ultimate 
consumer"  at  the  rate  of  not  less  than  $1,600  an  acre. 

Yet  even  within  what  may  be  considered  the  metropolitan  area  the 
price  of  farm  land,  as  gauged  in  this  way,  shades  down  to  compara- 
tively moderate  figures.  A  tract  of  517  acres,  south  of  the  city,  belong- 
ing to  G.  del  Amo,  assays  $377  to  the  acre  and  a  tract  of  472  acres,  in 
the  Long  Beach  region,  belonging  to  the  Montana  Land  Company,  $222. 
North  of  the  mountains  the  Palmdale  Land  Company's  tracts  may  be 
taken  as  typical  of  Antelope  Valley  agricultural  lands.  The  assess- 
ments range  from  less  than  $20  to  at  least  $90  an  acre,  and  the  average 
for  2,240  acres  indicates  a  "real  value"  of  $40.51. 

The  San  Fernando  Mission  Lands  Company,  an  Otis-Chandler  corpo- 
ration, and  its  related  companies  own  tracts  in  the  San  Fernando  Valley 
which  originally  totaled  16,000  acres.  These  have  been  reduced  until 
the  parent  company  has  now  only  9,710  acres.  They  are  assessed  at  an 
average  rate  of  $80  per  acre,  though  particular  parcels  run  as  low  as 
$10.40  and  as  high  as  $141.46  and  $151.55,  while  one  diminutive  parcel 
of  five  acres  runs  to  $228.  The  parcels  assessed  at  approximately  $150 
per  acre  are  presumably  the  ones  for  which  the  quoted  prices  are  $350, 
$375,  $400  and  $425.  Here  again  the  Tax  Commission's  ratio  is  some- 
what inadequate.  The  computed  "real  value"  of  these  lands  would 
be  $270.70  and  $290,  as  against  quoted  prices  from  33^^  to  46  per  cent 
higher. 

Only  one  of  the  large  holdings  in  Orange  County — that  of  the  Basten- 
chury  Ranch  Company,  of  2,658  acres — comprises  agricultural  land  of 
a  sufficiently  homogeneous  nature  to  warrant  any  deduction  from  this 
method  of  gauging  prices.  It  is  a  high  class  of  land,  irrigated,  planted 
to  young  trees,  and  is  to  be  cut  up  into  small  holdings.  It  is  assessed 
at  a  rate  which  yields  a  "real  value"  of  $476.77  an  acre.  The  greater 
part  of  the  I.  W.  Hellman  tract  of  6,900  acres  could  be  cultivated  if 
proper  drainage  were  applied  to  it.  But  it  is  assessed  on  the  basis  of 
its  present  rather  than  its  potential  value,  the  computed  figures  reaching 
only  $111.51  an  acre. 

The  highest  rate  of  assessment  on  an  entire  holding  in  San  Diego 
County  is  that  of  the  Syndicate  Land  Company,  a  developing  and 
selling  enterprise.  The  computed  "real  value"  is  only  $78.49  an  acre, 
which  would  indicate  the  inclusion  of  considerable  low-priced  land. 
The  price  list  of  the  Riverview  Farms,  a  colony  tract  of  the  San  Diego 


LARGE   LANDHOLDINGS   IX    SOUTHERN    CALIFORNIA.  25 

Farm  and  Mortgage  Company,  will  give  a  fairer  idea  of  the  price  of 
good  farming  land.  This  tract  is  located  near  Lakeside,  21  miles  from 
San  Diego,  and  is  partitioned  into  holdings  of  from  3^  to  about  15  acres. 
An  ample  water  supply  is  assured,  and  abundant  crops  of  a  wide  range 
of  products  are  promised  to  the  cultivator.  Prices  range  from  $85  to 
$180  an  acre,  the  average  being  probably  about  $125.  Price  quotations 
are  more  than  ordinarily  fictitious  in  this  county,  and  prices  paid  are 
sometimes  absurdly  smaller  than  prices  originally  asked.  The  Tax 
Commission's  ratio  probably  fairly  represents  the  difference  between 
assessed  and  "real  value. "  A  lawsuit  affecting  the  Jamul  ranch,  owned 
by  L.  J.  Wilde,  brought  out  from  eleven  witnesses  as  many  estimates 
of  its  value ;  the  average  of  these  estimates  was  $231,645.  The  land  is 
as.sessed  at  $62,070,  and  the  Tax  Commission's  ratio  applied  to  this 
figure  would  yield  a  value  of  $250,000. 

In  Riverside  County  a  tract  of  405  acres  belonging  to  the  Riverside 
Orange  Company  is  assessed  at  a  rate  which  would  indicate  a  current 
value  of  $568.  and  a  tract  of  181  acres  belonging  to  the  West  Riverside 
Estate  Company,  $417  an  acre.  Both  these  tracts  are  near  the  county 
seat.  In  the  San  Jaeinto-Hemet  region  the  Nuevo  Land  Company  has 
holdings  aggregating  5,407  acres,  of  which  the  best  portions  are  adver- 
tised for  sale  at  $250  an  acre.  A  tract  of  401  acres  assays  $145  in 
"real  value,"  another  of  159  acres,  $226,  and  a  third  of  46  acres  (pre- 
sumably with  an  element  of  urban  value  included),  $515.  Much  land 
in  this  county  is  assessed  at  trifling  figures.  The  entire  holdings  of  the 
Empire  Land  and  Cattle  Company,  86,076  acres,  average  but  $16.50 
an  acre  in  computed  value,  and  those  of  the  El  Sobrante  Land  Company, 
16,225  acres,  $10  an  acre.  The  limit  of  low  valuation  is  reached  in 
the  ease  of  the  349,228  acres  of  unpatented  railroad  lands,  of  which  the 
average  market  value  would  seem  to  be  56  cents  an  acre,  though  thou- 
sands of  these  acres  are  assessed  at  a  figure  which  yields  a  value  of 
only  13  cents  an  acre. 

San  Bernardino  County  has  also  a  vast  stretch  of  relatively  worthless 
railroad  lands.  The  nearly  one  and  three-quarter  million  acres  belong- 
ing to  the  Southern  Pacific  Land  Company  are  assessed  at  figures  which 
indicate  average  values  of  $2.57  an  acre  for  the  patented  lands  and  96 
cents  for  the  unpatented.  Averages,  however,  are  of  small  meaning 
here,  for  the  patented  lands  include  not  only  some  22,886  acres  sold 
under  contract  (mostly  to  settlers  and  therefore  presumably  of  some 
agricultural  value),  but  also,  among  lands  offered  for  sale,  6,045  acres 
at  prices  ranging  from  $11  to  $75.  Of  the  nonrailroad  lands  In  the 
large  holdings  the  highest  assessments  (except  for  tracts  which  carry 
a  prospective  urban  value)  are  found  in  the  Chino  and  Fontana  dis- 
tricts. A  tract  of  823  acres  in  the  Brooke  district,  belonging  to  the 
Fontana  Land  Company,  indicates,  from  its  assessment,  a  current  value 


26  COMMISSION    OF   IMMIGRATION    AND    HOUSING. 

of  $200  an  acre.  Another  tract,  of  2,058  acres  belonging  to  the  same 
company,  in  the  Fontana  Heights  section,  assays  $197.  The  whole  of 
the  4,000  acres  of  the  American  Beet  Sngar  Company,  mostly  about 
Chino,  average  $167  in  value,  while  one  tract  of  545  acres  assays  $221. 
The  apple  lands  of  the  Redlands  and  Yucaipa  Land  Company  show 
average  values  of  $127,  with  some  parcels  running  to  $245. 

Imperial  County,  though  unique  in  so  many  ways,  has  at  least  one 
limit  to  its  singularity.  Here,  as  elsewhere  in  California,  the  exaggera- 
tion of  the  values  and  prices  of  land  is  a  confirmed  habit.  Though  the 
actual  inflation  is  less,  the  verbal  inflation  is  yet  considerable.  A  tract 
popularly  priced  at  $225  an  acre  may  be  sold  for  a  sum  as  low  as  70 
per  cent  of  that  figure.  Prices  are  relatively  low,  and  the  assessment 
rolls  reveal  no  valuations  comparable  to  those  of  the  good  agricultural 
lands  of  the  other  counties,  with  the  possible  exception  of  San  Diego 
County.  The  unimproved  Southern  Pacific  lands  about  Calipatria,  sold 
by  the  Imperial  Valley  Farm  Lands  Association,  have  brought  an  aver- 
age, according  to  a  personal  statement  by  the  president  of  the  associa- 
tion, of  $80  an  acre.  This  figure  agrees  almost  exactly  with  the  valuation 
as  computed  by  an  application  of  the  Tax  Commission's  ratio  to  the 
official  assessment.  Of  improved  land  no  parcels  were  found  which 
reached  higher  computed  value  than  $126  (a  tract  of  620  acres  belong- 
ing to  the  Title  Insurance  and  Trust  Company).  The  excellent  farm 
lands,  highly  improved,  of  the  Timken  Ranch  Company  average  but 
$96  an  acre  in  computed  value,  though  particular  parcels  reach  a  slightly 
higher  figure.  A  tract  of  1,235  acres  belonging  to  D.  R.  and  Agnes 
Crawford  assays  $102  per  acre,  and  other  tracts  range  from  $90  to  $124. 
Two  sales  of  land  near  Holtville  showed  prices  of  $125  and  $150  for 
highly  improved  and  cultivated  land.  The  figures  for  this  county  as 
a  whole  show  some  discrepancy,  it  is  true;  but  the  explanation  would 
seem  to  lie  in  the  probability  that  the  highest  priced  lands  are  not  to  be 
found  in  the  large  tracts,  but  in  independent  holdings  of  from  40  to 
100  acres. 

CONDITIONS  AND  TERMS  OF  SALE. 

Of  the  conditions  and  terms  upon  which  land  is  purchased,  only 
such  as  are  fixed  or  imposed  by  the  regular  selling  companies  are  sus- 
ceptible of  any  generalization  whatever.  The  terms  of  sales  by  other 
traffickers  in  land  have  an  immeasurable  range,  depending  upon  the 
land  hunger  or  the  financial  ability  of  the  purchaser,  the  need  or  the 
momentary  purpose  of  the  seller,  or  the  caprice  of  either.  First  among 
the  selling  companies,  by  reason  of  its  vast  holdings,  is  the  Southern 
Pacific  Land  C!ompany.  This  company  offers  the  choice  of  two  forms 
of  sale  contracts.     One  requires  cash  without  discount  for  sums  below 


LAKiiK    li,\M»ll(>l.l)lX(;s    I\    SOITIIKUN    (  ALIFORNIA.  27 

.i<:i(l(l.  ami  for  suiiis  alMtvc  that  amount  10  per  cent  of  price  at  purchase, 
and  nine  annual  payments  with  interest  at  (i  per  cent. 

The  other  form  requires  from  the  purchaser  the  construction  of 
a  dwelling  house  and  the  beginning:  of  residence  on  the  land  within  ten 
months  after  purchase,  the  cultivation  of  one-quarter  of  the  land  within 
22  months  and  of  one-half  within  46  months,  with  acquirement  of  water 
rights  when  necessary  and  continuous  residence  and  cultivation  during 
the  life  of  the  contract.  Thi.s  contract  runs  19  years.  Seven  and  one- 
half  per  cent  of  the  price  is  payable  at  purchase,  and  the  remainder  is 
amortized  into  19  annual  installments  each  representing  8.29  per  cent 
of  the  purchase  price,  the  total  embracing  price  and  annually  accruing 
interest.  A  tract,  for  instance,  bought  on  January  1,  1918,  would 
require  the  payment  of  $75  down  and  19  annual  payments  of  $82.90 
each  to  and  including  January  1,  1937.  The  total  payment  would 
comprise  $1,000  principal  and  $650.10  interest,  or  $1,650.10. 

It  is  probable  that  the  Southern  Pacific  Land  Company  holds  to  these 
terms.  The  terms  of  the  Imperial  Valley  Farm  Lands  Association 
are  more  flexible.  At  the  beginning  thej'  were  stated  to  be  one-fifth 
down,  with  four  equal  annual  payments  and  interest  at  7  per  cent. 
But  according  to  the  head  of  the  concern,  long  time  and  small  payments 
have  been  the  rule,  and  even  smaller  payments  and  longer  time  have 
been  granted  in  cases  wherein  the  purchaser  has  agreed  to  improve 
and  cultivate  his  land  at  once.  A  recent  sale  was  of  320  acres  on  an 
initial  payment  of  $3  an  acre,  and  another  of  160  acres,  on  an  initial 
payment  of  $2  an  acre,  with  the  remainder  of  the  initial  payment 
extended  to  July  11,  1919.  With  two  or  three  exceptions,  says  the 
same  informant,  no  sale  on  which  a  first  payment  has  been  made  has 
ever  been  cancelled. 

The  Commission  on  Land  Colonization  and  Rural  Credits  found  that 
the  time  of  payment  in  the  various  colony  schemes  of  the  state  covered 
a  range  of  from  3.2  to  11  years.  In  only  three  out  of  20  of  the  colonies, 
however,  was  the  time  less  than  four  years,  and  the  average  for  all  was 
5.8  years.  In  no  case  found  in  southern  California  among  selling  com- 
panies, except  the  cases  of  the  Imperial  Valley  Farm  Lands  Association 
and  the  Southern  Pacific  Land  Company,  is  the  ordinary  contract  time  of 
payment  more  than  four  years.  These  selling  companies  are  land  mer- 
chants, buying  and  disposing  of  parcels  of  the  commodity  land,  and 
naturally  they  want  a  quick  turnover  of  their  goods.  For  obvious 
reasons  the  Southern  Pacific  Land  Company  is  an  exception  to  this 
rule,  and  for  other  reasons  so  is  the  Imperial  Valley  Farm  Lands  Asso- 
ciation. Its  source  of  revenue  is  evidently  commissions,  and  it  can 
afford  to  take  a  long  chance  in  dealing  with  the  buyer  who  can  afford 
only  small  payments  extended  over  a  term  of  years.  Yet  even  in  the 
case  of  the  other  selling  companies,  there  is  great  flexibility  in  the 


28  COMMISSION    OF    IMMIGRATION    AND    HOUSING. 

cuforeeineiit  of  the  terms.  Each  land  raerehant  will  assert  that  none 
of  his  purchasers  is  ever  harassed  by  a  too  rigid  enforcement  of  the 
contract ;  that  whenever  extended  time  is  wanted  it  is  granted ;  that 
settlement  of  the  land  is  the  thing  mainly  desired,  and  that  cancella- 
tions are  avoided  by  all  means  not  entailing  an  absolute  loss  to  the 
company.  The  ample  interest  charge  goes  on,  of  course,  on  the 
extended  time,  and  though  it  is  an  insignificant  source  of  revenue  when 
compared  with  the  profits  on  the  sale  of  the  land  itself  it  is  one  of  the 
several  compensations  that  enable  the  landseller  to  deal  gently  with 
the  dilatory  purchaser. 

BENEFICIAL  USE  OF  LAND. 

■  It  is  certain  that  much  of  the  tillable  land  in  the  large  holdings  lies 
idle  in  the  face  of  insistent  demand  of  many  thousands  of  men  for 
access  to  the  soil.  It  is  also  certain  that  much  of  this  land  is  not  devoted 
to  its  most  productive  use. 

A  survey  of  land  conditions  in  San  Diego  County,  with  a  view  to 
increasing  crop  production,  which  was  made  by  the  local  Food  Admin- 
istration in  the  summer  and  fall  of  1917,  brought  out  the  estimate  that 
62,571  acres  of  easily  available  farm  land  were  then  lying  idle.  The 
area  under  cultivation  was  then  43,992  acres  in  the  staple  crops,  3,000 
acres  in  garden  truck  and  17,771  acres  in  fruits  and  nuts,  or  a  total  of 
64,763  acres.  The  cultivation  of  the  available  land  lying  idle  would 
thus  have  very  nearly  doubled  the  productive  area  of  the  county.  Of 
the  62,571  idle  acres,  39,011  were  cleared  but  not  irrigated,  while  of 
the  remaining  23,560  acres  the  statement  was  made  that  all  could  be 
easily  cleared.  "Water  was  said  to  be  then  available  for  4,812  acres  and 
could  readily  be  made  available  for  21,317  acres  more,  leaving  36,442 
acres  for  dry  farming.  The  greater  part  of  this  land  was  evidently 
contained  in  the  large  holdings. 

An  inquiry  into  the  agricultural  use  of  lands  in  Los  Angeles  County 
was  made  for  the  County  Council  of  Defense  in  the  fall  of  1917.  It 
showed  an  irrigated  area  of  222,041  acres  and  a  dry-farmed  area  of 
221,212  acres,  or  a  total  in  cultivation  of  443,253  acres.  An  estimate 
was  made  of  286,331  unplowed  acres  capable  of  being  dry  farmed,  and 
of  358,719  unplowed  acres  for  which  water  might  then,  or  at  some  later 
time,  be  obtained.  The  figures  for  cultivable  land  not  in  use  seem 
extraordinarily  high;  and  it  is  impossible,  from  data  available,  to  con- 
firm them.  But  if  the  real  total  is  even  half  of  that  given,  it  reveals 
a  deplorable  situation.  Little  or  none  of  this  land  can  be  in  the  small 
holdings,  since  these  are  almost  invariably  acquired  for  use  in  agricul- 
ture. Some  of  it  is  public  land,  and  some  of  it  doubtless  urban  or 
suburban  land;  but  the  greater  part  of  it  is  unquestionably  comprised 
in  the  large  holdings. 


LAKGK    LANl)JI()l>I)lNCi.S    IN    SOUTHERN    CALIFORNIA.  29 

Report.s  from  field  agents  to  the  State  Agricultural  College  in  April, 
1917,  stated  tliat  of  new  land  4,000  acres  in  Lo.s  Angeles  County,  30,000 
acres  in  Riverside  County  and  5,000  acres  in  San  Bernardino  County 
could  be  profitably  plowed  for  summer  fallow  and  that  irrigation  in 
southern  California  could  be  easily  extended  to  an  additional  100,000 
acres.  The  results  of  these  various  investigations,  made  under  radically 
differing  conditions,  can  not  be  reduced  to  a  definite  statistical  sum- 
mary. It  is  enough  to  say  that  they  indicate  large  areas  of  usable  land 
lying  idle. 

Of  land  not  devoted  to  its  most  productive  use  there  are  also  extensive 
areas.  Large  holdings  do  not  lend  themselves  to  intensive  cultivation. 
Where  the  small  holder  is  thrifty  with  liis  opportunities  the  large  holder 
is  prodigal;  and  what  is  tillable  under  the  most  modern  conditions  to 
the  man  who  owns  20  acres  is  either  untillable  or  unirrigable  to  the 
man  who  owns  10,000  acres.  An  expert  on  land  conditions  asserts  that 
18,000  acres  on  the  great  San  Joaquin  ranch,  in  Orange  County,  now 
dry  farmed,  could  be  watered  from  wells  already  in  existence  and  con- 
verted into  the  most  valuable  land;  and  this  estimate  was  raised  to 
25,000  acres  by  tbe  field  agents  of  the  agricultural  inquiry  of  April, 
1917.  On  another  tract  in  the  same  county,  now  marshy,  it  is  estimated 
that  proper  drainage  would  make  tillable  5,000  of  the  6,900  acres. 
One  may  find  these  instances,  though  in  varying  degree,  in  every  county. 
Large  areas  which  would  support  in  comfort  a  greatly  increased  rural 
population  and  add  enormously  to  the  riches  of  the  commonwealth  are 
withheld  from  their  best  use  or  from  any  beneficial  use  whatever. 

GENERAL  OBSERVATIONS. 

1.  It  thus  appears  that  in  the  eight  counties  of  southern  California 
there  are  279  holdings  (reducible  by  allowing  for  duplications  to  about 
255  holdings)  each  of  more  than  2,000  acres,  comprising  an  aggregate 
of  4,893,935  acres. 

2.  It  also  appears  that  the  Southern  Pacific  holdings  in  five  of  these 
counties  aggregate  2,598,775  acres. 

3.  It  also  appears  that  of  the  total  of  nonrailroad  and  nonpublic 
lands  in  these  counties,  roughly  approximated  by  the  federal  census 
figures  of  "land  in  farms"  (4,587,581  acres),  2,295,140  acres,  or  50 
per  cent,  are  owned  in  about  250  holdings. 

4.  It  also  appears  that  there  are  at  least  32  private  holdings  each  of 
more  than  15,000  acres;  that  seven  of  these  holdings  exceed  50,000  acres 
each ;  that  one  of  them  is  of  101,000  acres  and  another  of  183,399  acres. 

5.  It  also  appears  that  at  least  666,886  acres  of  the  2,295,140  acres, 
or  29  per  cent,  are  now  or  potentially  tillable ;  and  that  further  develop- 
ment of  water  resources,  the  application  of  scientific  farming  methods 


30  COMMISSION   OF   IMMIGRATION   AND   HOUSING. 

f^nd  the  reduction  of  large  holdings  into  smnli  holdings  would  consider- 
nbly  incrense  this  tillable  area. 

6.  It  further  appears  that  a  considerable  part  of  the  land  in  these 
large  holdings  lies  idle,  that  another  considerable  part  of  it  is  not 
devoted  to  its  bCvSt  use,  and  that  much  of  that  })art  of  it  which  is  for 
sale  is  priced  far  above  its  productive  value  and  offered  under  condi- 
tions which  make  its  purchase  by  the  average  landseeker  hazardous 
and  by  the  poor  man  impossible. 

Much  of  the  land  in  these  great  holdings  is  not  for  sale  under  any 
conditions;  some  of  it  is  for  sale  in  tracts  of  a  size  which  renders  it 
wholly  inacce-sible  to  the  man  of  small  means  wishing  to  make  produc- 
tive use  of  it,  and  most  of  what  is  for  sale  is  held  at  prices  which  pru- 
dence forbids  the  prospective  cultivator  to  pay.  With  other  commodi- 
ties a  sluggish  market  and  poor  demand  bring  reduction  of  prices. 
But  land,  in  large  holdings  is  owned  by  men  who  can  aflt'ord  to  wait ; 
who  know  that  sooner  or  later  the  pressure  of  population  upon  the 
means  of  subsistence  will  force  the  purchase  of  their  lands  at  their  own 
prices.  These  prices  are  thus  maintained  in  the  face  of  a  temporary 
lessened  demand,  and  with  the  increase  of  population  in  the  vicinity 
of  the  lands  the  prices  are  even  advanced. 

Much  of  this  purchasable  land  has  been  advertised,  and  is  still  being 
advertised,  with  gros-i  misrepresentation.  Much  of  it  has  been  sold 
laider  questionable  pretenses.  The  great  frauds  practiced  upon  settlers 
in  California  form  a  chapter  in  the  state's  history  which  is  an  ineradi- 
cable disgrace.  The  spent  savings  and  the  toil  of  thousands  of  ruined 
lives  have  gone  to  the  making  of  a  few  fortunes,  and  for  all  this  deceit 
and  robbery  there  has  been  little  or  no  redress.  Powerful  interests 
stand  determinedly  in  the  way  of  any  effective  reform.  The  legislature 
of  1917  passed  a  law,,  it  is  true,  penalizing  certain  misrepresentations 
regarding  land.  But  it  was  a  weak  and  partial  law — a  law  aimed  only 
at  brokers  in  real  estate — and  its  passage  by  the  legislature  was  probably 
acquiesced  in,  despite  a  show  of  opposition,  by  the  exploiting  land 
interests  in  the  belief  that  it  could  not  pass  the  courts.  On  this  very 
ground  that  it  was  partial — that  it  penalized  in  the  broker  what  it 
permitted  in  the  insurance  company — the  Supreme  Court  declared  it 
unconstitutional.  The  field  was  thus  cleared  for  another  campaign  of 
frauds  upon  settlers. 

Large-scale  ownership  means,  of  course,  tenantry  or  wage  labor. 
Tenantry  is  a  condition  that  arises  from  a  complexity  of  factors,  and 
wherever  studied  it  shows  baffling  contradictions.  One  might  expect  to 
find  little  of  it  in  Imperial  County,  where  the  farm  unit  is  small  and 
where  there  are  only  a  few  large  holdings,  the  largest  of  them  being  less 
than  6,000  acre,-;.  Yet  tenantry  flourishes  here  as  nowhere  else  in 
southern  C'alifornia,  and  it  is  increasing.     The  explanation  is  a  climate 


LAKGE    I..\M)U(»1AHNG.S    IX    SOUTHERN    CALIFORNIA.  31 

wliii  h  the  landowner  seeLs  to  escape,  the  eoustant  influx  of  impecunious 
fanners  from  the  south,  and  the  marvelous  produetivity  of  a  soil  which 
brings  high  rentals  from  the  cultivator,  thus  enabling  the  owner  to  live 
comfortably  in  some  less  torrid  locality.  One  might  expect  to  find 
iinuh  tenantry  in  Ventura  County,  where  there  are  many  large  holdings 
;iiui  where  the  dispasitiou  not  to  sell  land  under  any  circumstances  is 
common.  Yet  here  one  finds  less  tenantry  than  elsewhere.  The 
f'xplanation  is  a  psychological  one,  though  based  on  economic  factors. 
The  owner  prefers  to  "handle"  his  land  himself;  with  wage  labor  to 
help  him  he  expects  greater  returns  from  the  soil  through  his  own 
operation  than  tlirough  operation  by  tenants;  and  though  wage  labor 
is  reputedly  a  source  of  trouble  and  uncertainty,  he  chooses  it  as  a 
means  of  sticking  close  by  his  land. 

It  is  thus  tenantry  here  and  wage  labor  there,  according  to  particular 
circum.stance.s  not  always  easy  to  determine;  and  though  the  laborer 
may  become  a  tenant  and  the  tenant  an  owner,  such  transformations 
itie  too  few  and  scattered  to  affect  the  general  conditions.  The  great 
mass  of  the  land  is  held  by  an  insignificant  few,  who  do  with  it  as  they 
will,  and  the  ideal  of  a  rural  society  composed  of  many  small-unit 
owners,  each  a  tiller  of  the  soil — the  ideal  of  socially  minded  men  in  all 
times — is  one,  so  far  as  southern  California  is  concerned,  for  which 
there  is  not  the  slightest  present  basis  of  hope. 

The  need  of  moderately,  large  holdings  for  stock  raising  may  be 
Mdmitted.  Stock  cannot  ])e  profitably  raised  on  small  areas  of  natural 
pasture.  But  the  only  effect  so  far  of  the  Stock  Raising  Homestead 
law  of  December  29,  1916,  granting  grazing  homesteads  of  640  acres, 
has  been  to  give  a  fresh  impetus  to  land  frauds.  In  many  localities 
near  the  already  large  holdings  of  grazing  land,  employees  of  cattle 
companies  have  filed  ui>on  these  homesteads  with  no  intention  whatever 
of  ownership  but  only  a  turning  the  land  over,  when  finally  proved,  to 
their  employers. 

lint  large  holding>i  of  tillable  land,  or  land  in  which  even  a  moderate 
portion  is  tillable,  are  productive  of  a  long  train  of  social  evils.  To 
recount  them  in  the  face  of  the  fact  that  they  have  been  recounted  with 
almast  identical  i)articnlarity  by  every  land  reformer  from  ancient 
lfel)rew  times  to  the  present,  seems  a  needless  waste  of  effort.  It  is 
enough  for  present  purpases  to  say  that  they  are  recognized  by  every 
one  who  has  not  a  material  interest  in  the  maintenance  of  exploitation 
througii  tlie  land,  and  that  long  ago  (1879)  this  recognition  was  written 
into  the  constitution  of  California.  The  fact,  according  to  Dr.  Arthur 
Nichols  Young,  in  his  "The  Single  Tax  Arovement  in  the  United 
States,"  that  this  declaration  was  "pa.ssed  with  laugh^  for  political 
reasons."  does  not  lessen  the  enduring  fact  that  it  is  an  integral  part 
iA'  the  organic  law  and  might  have  been  expected  to  exert  some  influence 


32  COMMISSION    OF   IMMIGRATION    AND    HOUSING. 

on  California  legislation.  But  the  policy  and  the  practice  of  the  state 
have  been  the  contrary  of  what  is  therein  expressly  stated.  The  old 
concentration  of  land  ownership  which  comes  down  from  the  Spanish- 
]\rexican  times  has  in  a  large  degree  persisted;  and  superposed  upon 
this  is  the  new  concentration  of  ownership  afforded  by  modern  wealth. 
No  statute  or  ruling  by  the  state  government,  so  far  as  known,  has  inter- 
posed any  bar  to  this  persistence  of  the  old  system  or  the  development 
of  the  new.  The  influx  of  population  has  furnished  an  economic  motive 
for  breaking  up  large  holdings  in  or  about  townsites  into  building  lots 
and  to  some  extent  into  small  rural  holdings.  But  otherwise  law  and 
economic  conditions  have  made  for  the  conservation  and  fostering  of 
large  holdings.  A  remedy,  thoroughgoing  and  of  immediate  applica- 
tion, is  needed.  On  the  one  hand,  the  holding  of  large  areas  of  land 
should  be  made  economically  undesirable  to  the  individual,  the  family 
or  the  corporation ;  on  the  other  hand,  the  intensive  use  of  the  soil,  in 
small  allotments,  should  be  promoted  by  the  state,  through  every  means 
in  its  power. 

PART  II. 
A  CONSIDERATION  OF  REMEDIES. 

Against  an  evil  so  gross  and  so  deeply  rooted,  and  defended  by 
interests  so  powerful  and  so  uncompromising,  any  jiroposal  of  remedies 
must  seem  audacious.  But  no  time  offers  so  golden  an  opportunity  as 
this,  when  the  imperative  obligation  to  our  returning  soldiers  gives 
new  emphasis  to  the  need  of  opening  up  the  land;  and  if  nothing  can 
now  be  done,  then  accomplishment  must  wait  for  some  undiscernible 
time  in  the  far  future. 

Of  the  many  proposals  or  plans  so  far  advanced,  the  three  which  of 
late  have  been  most  in  the  public  mind  are :  The  recommendations  of 
the  State  Tax  Commision  (1917)  ;  the  colonization  plan  of  the  Land 
Settlement  Board,  and  the  proposal  to  institute  an  exclusive  tax  on 
ground  rent  (the  single  tax). 

THE   TAX   COMMISSION'S   RECOMMENDATIONS. 

The  report  of  the  State  Tax  Commission  covers  a  wide  range  of  sub- 
jects relating  to  the  general  subject  of  taxation.  It  gives,  however,  a 
particular  emphasis  to  the  land  pr()])lem,  and  for  the  elucidation  of  this 
problem  it  assembles  a  considerable  body  of  valuable  data.  The  Tax 
Commission  i-epeats  with  approval  the  paragraph  in  the  State  Constitu- 
lion  de])recating  large  holdings  of  unimproved  land  and  further  depre- 
cates the  "liolding  of  large  interests  in  improved  land."  But  it  is 
against  anything  which  "will  destroy  any  individual's  accumulated 
property  rights,"  and  therefore  it  disapproves  the  proposal  of  the  Aus- 


LARGE   LANDHOLDINGS   IN   SOUTHERN   CALIFORNIA.  33 

tralian  graduated  laud  tax.  It  favors,  as  has  previously  been  men- 
tioned, a  seientifie  classification  of  lands,  and  it  also  favors  the  assess- 
ment of  land  at  full  value.  It  furthermore  favors  a  tax  on  the  future 
increase  of  land  values, ' '  with  a  heavier  burden  to  be  placed  upon  unim- 
proved and  undeveloped  lands  than  is  placed  upon  those  that  are 
l)encficially  used. ' ' 

Ass&ssment  at  full  value,  which  the  Tax  Commission  ruefully  admits 
to  he  as  remote  from  accomplishment  as  ever,  would  assuredly  be  a  step 
in  advance.  The  scientific  classification  of  lands  is  needed,  but  the 
urgency  of  a  fundamental  reform  forbids  delay.  As  to  the  proposed 
tax  on  the  future  increase  in  land  values,  the  comment  of  the  California 
League  for  Home  Rule  in  Taxation  seems  sufficient.  "We  can  see  no 
reason,"  says  that  association,  "for  attempting  to  .discriminate  between 
the  future  increased  land  values  and  the  values  which  have  heretofore 
accrued.  Such  values  are  of  the  same  nature  and  produce  the  same 
economic  effect  irrespective  of  the  time  of  their  creation. ' '  The  refusal 
of  the  Tax  Commission  to  countenance  any  measure  which  "will  destroy 
any  individual's  accumulated  property  rights,"  seems  curiously  anach- 
ronistic in  this  year  1918.  In  every  nation  under  the  sun  what  have 
heretofore  been  thought  to  be  property  rights  are  undergoing  a  trans- 
formation ;  and  that  movement,  far  from  having  reached  its  crest,  is 
from  every  present  indication  only  at  its  beginning. 

THE  LAND  COLONIZATION  PLAN. 

The  history  and  plan  of  the  Land  Settlement  Board  are  too  well 
Imown  to  need  any  extended  relation  or  description  here.  This  plan 
offers  good  land,  on  small  payments  and  long  time.  It  brings  to  the 
settler  financial  assistance  and  instruction  by  the  state.  It  frees  the 
settler  from  the  land  shark,  places  him  in  a  community,  establishes 
rural  institutions  and  makes  farm  life  attractive.  Within  its  limita- 
tions it  has  every  possible  merit;  and  it  ought  to  be  widely  extended  by 
immense  funds,  raised  either  by  levy  or  by  bond  issues.  No  amounts 
prudently  spent  on  this  plan  will  be  hazarded  or  lost :  they  can  make, 
in  the  long  run,  only  for  a  richer  and  more  prosperous  commonwealth. 

Nevertheless,  it  is  a  "plan  with  definite  and  obvious  limitations.  With 
its  widest  conceivable  extension  it  can  not  meet  all  the  requirements  for 
the  settling  of  the  land. 

1.  It  accepts  necessarily  the  current  speculative  price  of  land.  That 
is,  nothing  in  the  i)lan  aims  at  tlie  depression  of  this  price  or  the  cor- 
rection of  the  terms  upon  which  lam!  is  generally  sold  to  settlers  in  the 
state.  The  board,  it  is  true,  obtained  favorable  terms  and  no  doubt  a 
reduction  in  prit-e  on  the  land  which  it  bought;  but  it  is  notorious  that 
any  euneession  made  in  this  nuittcr  has  been  prompted  by  the  expecta- 
tion of  a  rise  in  land  values  in  the  vicinity  of  the  settlements.      In 


34  COMMISSION    OP   IMMIGRATION    AND    HOUSING. 

response  to  the  board's  proposal  to  purchase  land,  many  large  land- 
iiolders  (not  less  than  40,  in  17  counties)  hurried  forward  with  offers 
of  tracts  aggregating  200.000  acres;  and  this  eagerness  was  manifested 
in  spite  of  the  fact  that  the  terms  stated  by  the  board  were  exception- 
iilly  unattractive  in  the  eyes  of  the  average  California  land  merchant. 
Thus,  for  any  moditication  of  current  terms  and  prices  obtained  by 
ihe  board  for  its  own  settlers,  there  will  be  a  corresponding  increase  in 
prices  and  stitfening  of  terms  for  settlers  elsewiiere.  The  crying  evil 
of  high  prices  and  short  terms  of  payment  throughout  the  state  remains 
untouched. 

2.  Within  its  present  scope  it  can  not  have  the  slightest  effect  on  the 
land  situation  in  California.  According  to  the  latest  announcement, 
the  3,520  acres  opened  accommodate  53  farmers  and  21  laborers,  and  the 
2,500  acres  later  to  be  opened  may  swell  the  grand  total  to  something  like 
100  farmers  and  40  laborers.  Of  course  the  plan  may  be,  as  it  should 
be,  widely  extended,  but  any  extension  within  conceivable  limits  would 
still  leave  general  conditions  in  the  state  only  slightly  affected. 

3.  It  offers  small  encouragement  to  the  poor  man.  A  late  statement 
is  to  the  effect  that  the  applicant  for  a  farm  must  have  at  least  $1,500 
f-apital,  and  he  is  advised  that  the  amount  of  from  $2,500  to  $3,000 
would  be  still  better.  If  the  social  purpose  is  to  open  the  land  of 
California  to  those  who  most  need  it,  this  plan  assuredly  does  not  meet 
the  final  test. 

4.  It  offers  no  lodgment  to  the  thousands  of  experienced  farmers 
seeking  new  lands,  whose  independent  spirit  prompts  them  to  reject 
the  colony  system,  and  instead  to  choose  their  own  locations  and  to 
])ractice  their  own  methods  of  farming. 

As  a  demonstration,  it  is  admirable;  as  an  auxiliary  of  other  plans 
it  will  prove  of  the  utmost  service;  but  it  needs  to  be  supplemented  by 
general  provisions  making  undesirable  the  ownership  of  large  areas  of 
land. 

THE  SINGLE  TAX. 

The  proposal  of  the  single  tax,  in  one  guise  or  another,  comes  recur- 
rently before  the  voters  of  California.  The  supporters  of  the  proposed 
tax  contend  that  it  would  l)reak  up  the  large  holdings  and  make  land 
accessible  to  all.  This  is  not  the  place  for  an  exhaustive  analysis  of 
this  proposal;  but  any  treatment  of  the  land  problem  which  ignored  a 
measure  so  insistently  advocated  would  be  incomplete. 

The  tei*m  "single  tax"  is  confusedly  used  to  cover  a  wide  range  of 
land  ta.xcs.  Obviously,  a  single  tax  is  nothing  if  not  single;  and  when 
a  lax  on  land  values  shares  its  jilace  in  a  revenue  system  Avith  other 
taxes  it  should  Ix'  designalcd  l)y  some  term  that  does  not  imply 
excjusiveness, 


I,\K(iK    i,ANI)llUl.l)l.\(iS    IN    MJl  THKKN    CALIFORNIA.  35 

For  the  tax  i>iup()s<nl  by  Hrnry  (Jeorge  the  term  ''exclusive  single 
tax,"  oven  though  tantologioal.  would  prove  better  than  the  one  now 
used.  Dr.  Young,  in  his  book.  "The  Single  Tax  Movement  in  the 
United  States,"  propo.ses  "exclusive  land  tax."  ^lore  definite,  how- 
ever, even  if  less  wieldy,  would  be  "exclusive  land- value  tax."  But 
a  usable  term  is  also  sadly  needed  for  the  tax  which  is  not  exclusive 
but  wiiich  yet  levies  upon  the  use-value  of  land.  The  term  "site  tax" 
i:s  inadeciuate,  as  in  the  main  it  can  relate  only  to  urban  land;  the  term 
"unearned  increment  tax"  suggests  only  one  phase  of  the  matter;  the 
term  "economic  rent  tax,"  which  might  he  supposed  to  meet  the  needs, 
is  too  cumbrous  for  use ;  and  it  is  vitiated,  moreover,  by  current  changes 
(or  perhaps  general  confusion)  in  the  meaning  of  the  term  economic 
rent.  On  the  whole,  the  term  "land-value  tax"  seems  best  adapted 
for  the  designation  of  this  tax  which  is  not  sole  and  unique,  just  as  the 
term  "exclusive  land- value  tax"  seems  best  adapted  for  the  one  which 
supplants  all  other  taxes. 

Perhaps  a  majority  of  thoughtful  persons  in  the  towns  and  cities 
have  come  to  take  a  favorable  attitude  toward  the  tax  on  land  values, 
so  long  as  it  is  not  exclusive.  If  only  they  could  be  convinced  that  it 
would  not  unduly  disturb  established  revenue-producing  systems,  they 
would  probal)ly  at  any  time  register  their  mandate  at  the  polls  to  give  it 
a  trial.  For  it  expresses  in  simple  form  a  proposal  to  remedy  what 
increasing  numbers  of  persons  have  come  to  look  upon  as  a  giant  evil — 
the  appropriation  by  a  few  individuals  of  the  enormous  values  added 
to  urban  land  by  industry  and  the  movement  of  population.  They 
believe  that  this  increased  wealth  belongs  to  society,  and  that  it  should 
be  t^ken  from  its  appropriators.  Though  rural  populations  are  still 
prone  to  look  upon  a  general  land-value  tax  with  apprehension,  in 
many  cities  it  has  won  a  strong  measure  of  support. 

But  the  exclusive  land-value  tax  has  no  such  body  of  adherents. 
After  one  hundred  and  forty  years  of  propaganda  in  its  behalf  (for 
it  comes  down  to  us  from  the  days  of  the  Physiocratic  School  in  France, 
and  in  each  geiieration  has  had  its  apostles)  it  has  won  few  supporters 
among  economists  and  onl}'  a  limited  numlier  of  followers  among  the 
general  body  of  citi/.ens.  ]\Ir.  Jaseph  Dana  Miller,  editor  of  the  Single 
Tax  Keview.  writes  to  Dr.  Young  in  a  letter  of  March  24,  1916:  "I 
should  say  that  there  are  in  the  United  States  between  25,000  and 
50,000  convinced  single  taxers  who  are  in  the  passession  of  the  full 
vision."  At  the  best  this  number  is  but  an  inconsiderable  fraction  of 
the  people  of  America  who  take  an  interest  in  public  questions. 

Yet.  despite  all  objections  that  may  be  advanced  against  so-called 
straight  "single  tax  principles,"  it  is  well  known  that  in  this  state 
there  has  already  been  developed  a  sufficient  sentiment  regarding  the 
evil  of  large  holdings  to  promise  a  sweeping  majority  for  a  rational 


36  COMMISSION    OF   IMMIGRATION    AND    HOUSING. 

iiiecisure  ol'  land-value  taxation.  About  tlie  attitude  of  the  majority  of 
Ihe  urban  population  there  is  no  doubt;  and  it  seenLS  certain  that  the 
rural  population  wonld  support  a  measure  Avhieh  exempted  holdings 
of  moderate  .size  or  value,  but  bore  heavily  upon  large  holdings. 

So  far,  however,  there  has  been  no  opportunity  of  testing  this  question 
at  the  polls.  On  the  one  hand  are  the  uncompromising  single-taxers, 
who  have  stubbornly  insisted  upon  a  purely  doctrinaire  measure;  they 
will  have  the  single  tax  or  nothing.  On  the  other  hand  are  thousands 
of  voters  convinced  of  the  need  of  taxing  the  large  holdings,  but  also 
convinced  that  the  exclusive  land-value  tax  is  false  in  economics  and 
would  prove  ruinous  in  practice ;  they  wall  therefore  continue  to  suffer 
the  existence  of  present  evils  rather  than  to  take  a  leap  into  the 
unknown.  There  could  thus  be  no  union  of  the  forces  antagonistic  to 
land  monopolization.  But  the  radical  decline  in  the  California  vote 
on  an  uncompromising  single  tax  measure  (a  decline  from  260,000  votes 
in  1916  to  110,000  votes  in  1918)  may  prove  the  harbinger  of  success  for 
a  rational  and  effective  measure. 

SUGGESTIONS  FOR  A  POLICY  AND  PROGRAM. 

No  proposal  to  solve  so  great  and  complicated  a  problem  as  the  land 
problems  in  California  can  be  advanced  that  will  not  contain  real  no 
less  than  seeming  contradictions,  imperfections  of  detail,  the  creation 
of  new  difficulties  in  the  i)lace  of  tliose  cleared  away.  But  if  remedial 
action  is  to  await  the  formulation  of  a  faultless  plan  it  will  wait  for- 
ever. The  land  problem  of  California  has  been  the  subject  of  agitation 
and  of  popular  demand  for  remedies  for  more  than  fifty  years.  At 
times,  as  in  the  early  seventies  and  during  the  last  four  years,  this  agi- 
tation has  prompted  a  great  movement  looking  to  immediate  and  drastic 
action.  But  in  all  that  time  nothing  (except  the  opening  of  the  coloni- 
zation project  of  the  Land  Settlement  Board)  has  been  done.  The  evils 
denounced  fifty  years  ago  have  not  been  corrected,  but  have  been  con- 
firmed and  multiplied.  The  situation  is  now  what  it  then  was,  only 
worse;  for  the  evils  have  an  added  prestige  and  security  given  them 
through  custom  and  prescription.  The  need  is  therefore  action;  and  a 
remedial  proposal  is  to  be  judged  not  by  the  test  of  whether  or  not  it 
is  free  from  objections,  but  by  the  test  of  whether  or  not  it  offers  some 
substantial  betterment  of  a  notoriously  gigantic  evil. 

The  Commission  is  of  the  opinion  that  a  practicable  plan  can  be 
formulated  which  centers  about  a  graduated  land  tax. 

SOME  PRELIMINARY  STEPS. 

But  before  any  specific  reform  of  the  land  problem  can  be  attempted 
certain  preliminary  steps  are  essential. 

First,  there  is  needed  a  formal  declaration  by  the  state  of  a  land 
policy — a  declaration  on  broad  lines,  but  in  precise  statements,  of  just 


LARGE   LANDIIOLDINGS   IN    SOUTHERN    CALIFORNIA.  37 

what  it  aims  to  do.  'I'lic  statt'iiient  in  tli<'  constitution  of  1879  means 
anything  or  nothing;  for  thirty-nine  years  it  has  stood  there  without 
having  had  any  disciM'nible  effect  upon  ('alifornia  legishitioiL  The 
statement  of  a  land  pt)licy  should  be  in  such  terms  as  to  serve  as  a 
guide  and  a  standard  for  legislative  action;  in  such  terms  that  the 
people  may  at  all  times  use  it  as  a  test  by  which  to  judge  the  action  of 
their  representatives  on  every  matter  relating  to  the  land. 

Our  first  duty  in  remedial  action  is,  without  question,  to  our  returning 
soldiers — to  prove  to  them  that  the  commonwealth  is  not  ungrateful  for 
their  heroic  service,  and  that  our  gratitude  is  to  be  expressed  not  merely 
by  plaudits  and  celebrations,  but  by  the  making  of  ample  provision,  at 
whatever  cost,  for  the  economic  security  of  those  who  have  risked  their 
lives  for  our  protection. 

But  a  policy  based  merely  upon  providing  rural  homes  for  soldiers 
is  likely  to  wear  itself  out  within  a  very  few  years — possibly  within  a 
year  or  two.  The  number  of  California  soldiers  eager  to  go  upon  the 
land — or  even  Avilling,  under  exceptional  conditions,  to  go  —  is  an 
uncertain  quantity  and  may  prove,  upon  trial,  to  be  inconsiderable. 
But  whether  this  number  proves  great  or  small,  there  is  now  and  has 
always  been  an  urgent  demand  upon  the  part  of  thousands  of  experi- 
enced civilian  farmers,  and  also  of  inexperienced  civilians  wishing  to 
turn  to  the  soil,  for  cultivable  lands;  and  this  demand  should  be  met 
by  the  fostering  care  of  the  state.  Our  land  policy  should  be  broad 
enough  to  aim  at  an  immense  increase  in  the  number  of  tillers  of  the 
soil  and  the  creation  of  a  prosperous  and  secure  riiral  society. 

Second,  there  sJwuld  he  a  geniune  co-ordination  of  every  bureau,  com- 
mission or  other  state  ageiicy  Imving  to  do  with  rural  land  and  the 
supply  of  water.  The  chaos  of  land  conditions  in  California  is  fully 
reflected  in  the  chaos  of  administrative  control  of  those  conditions. 
The  school  lands  are  under  the  control  of  the  Surveyor  General.  The 
Land  Settlement  Board  is  nominally  an  independent  body,  but  is  really 
an  agency  of  the  Agricultural  College.  The  State  Water  Commission 
is  an  independent  body ;  so  is  the  State  Reclamation  Commission,  and 
so  is  the  Irrigation  District  Bond  Commission.  When  the  office  of  Real 
Estate  Commissioner  was  established  it  also  was  made  independent ;  and 
though  the  courts  have  abolished  the  office,  it  may  possibly  be  revived 
as  an  independent  agency  under  a  law  designed  to  meet  the  constitu- 
tional objections.  There  are  also  certain  functions  now  performed  by 
other  commissions  which  ought  properly  to  be  performed  by  a  con- 
solidated l)ody  having  exclusive  control  of  land  rights  and  water  rights, 
bounded  only  by  the  claims  of  federal  jurisdiction.  It  is  a  question  if 
to  this  centralized  body  should  not  also  be  added  the  Viticultural  and 
Horticultural  Commissions.  The  sweeping  attacks  made  by  reactionary 
elements  on  the  commissions  in  general  would  lose  most  of  their  force 


'SS  COMMISSION    OP   IMMIGRATION    AND   HOUSING. 

it'  those  aiionialie.s  were  corrected.  P^or  the  operation,  moreover,  of  auv 
(letiiiite  program  regarding"-  the  land,  thi.s  consolidation  is  a  prerequisite. 
Third,  there  should  he  legislation  requiring  from  the  county  assessors 
the  annual  gathering  and  tabulating  of  statistics  regarding  the  size  of 
farms,  the  number  of  landliolders,  and  other  useftd  information  regard- 
ing agrarian  conditions.  The  lack  of  exact  statistics  on  all  these  matters 
is  deplorable;  and  the  difficulty  of  collecting  them  by  independent 
research  is  almost  insurmountable.  But  they  could  easily  be  gathered 
by  the  assessors  as  a  part  of  their  work  of  appraisal,  assessment  and 
recording  of  ownership.  The  interests  that  have  sought  and  are  still 
seeking  to  keep  conditions  unchanged  have  of  course  opposed  all  pub- 
licity on  the  subject,  and  consequently  the  data  required  to  be  turned  in 
to  the  state  by  the  assessors  are  so  meagre  as  to  be  almost  valueless  for 
the  forming  of  any  general  judgment  on  land  conditions.  But  a  state 
which  undertakes  a  program  of  land  reform  will  need  the  most  ample 
and  detailed  statistics  of  land  holdings;  it  will  need  to  know  minutely 
the  results  of  the  operation  of  the  program;  and  there  is  no  simpler 
and  cheaper  way  of  obtaining  the  information  than  that  of  requiring  it 
from  the  assessors. 

OBJECTIONS  T-O   GRADUATED  TAX. 

The  graduated  land  tax  is,  as  already  noted,  opposed  by  the  State 
Tax  Commission,  on  the  ground  that  it  would  destroy  accumulated 
property  rights.  "We  do  not  believe,"  says  the  Tax  Commission, 
"that  it  would  be  just  to  levy  a  graduated  land  tax  upon  the  total  land 
value  of  holdings  above  a  certain  limit  for  the  reason  that  in  many 
instances  there  are  ownerships  where  the  lands  would  increase  very 
slowly  or  even  decrease  in  value  for  a  time,  below  the  actual  cost,  and 
such  owners  would  bear  as  heavy  a  burden  under  the  graduated  land 
tax  as  those  whose  lands  were  increasing  rapidly."  The  Tax  Commis- 
sion's contention  is  given  here  without  further  comment  for  such  light 
as  it  may  throw  upon  the  attitude  of  that  commission. 

The  Home  Rule  in  Taxation  League  (a  single-tax  body)  also  opposes 
the  graduated  tax.  In  New  Zealand  and  Australia,  it  says,  this  tax 
has  frequently  resulted  in  the  evasion  of  the  intent  of  the  law  through 
the  dividing  up  of  large  holdings  among  members  of  a  social  unit — 
a  family  or  a  corporation.  It  asserts  that  no  such  tax,  "especially  in 
confined-to-land  values  hereafter  created,  would  cause  the  owner  to  give 
it  away  or  sell  it  for  less  than  the  market  value. ' '  It  further  says  that 
the  tax  is  discriminatory,  and  therefore  a  species  of  class  legislation^ 
and  that  by  reason  of  this  fact  a  lax  enforcement  is  entailed. 

The  State  Tax  Commission's  contention  that  the  tax  would  destroy 
accumulated  property  rights  may,  if  amended  by  the  substitution  of 
the  word  "impair"  for  "destroy,"  be  cheerfully  conceded.     The  tax 


LARGE   LANDHOIiDINGS   IN    SOUTHERN    CALIFORNIA.  39 

would  have  just  that  purpose  and  just  that  effect;  but  nothing  less 
than  a  provision  which  would  make  less  valuable,  and  therefore  less 
desirable,  the  ownership  of  large  areas,  will  answer  the  purpose.  There 
is,  indeed,  an  alternative  which  one  sometimes  hears  suggested  by  real 
estate  men.  That  is  the  bonding  of  the  state  in  some  enormous  sum 
to  provide  for  the  purchase  of  the  lands  at  their  present  prices  as  a  step 
toward  their  partition.  But  no  one  has  any  serious  belief  that  such 
a  program  will  be  put  before  the  legislature  or  the  people.  If,  there- 
fore, there  is  a  general  disposition  on  the  part  of  the  people  of  Cali- 
fornia to  avoid  the  impairment  of  the  present  speculative  values  of 
real  estate,  there  will  be  no  general  partition  of  the  large  holdings. 

That  a  law  may  be  evaded  is  no  new. phenomenon,  and  the  Home 
Rule  League's  specification  of  evasion  of  the  graduated  tax  law  has 
small  force.  Doubtless  even  the  single  tax,  if  it  were  in  operation, 
would  fail  of  an  equal  and  exact  enforcement  in  all  places.  A  tax 
which  has  been  in  successful  operation  for  years  in  the  Commonwealth 
of  Australia  must  have  something  to  say  for  itself  in  spite  of  the  fact 
that  it.s  iijtent  is  sometimes  evaded.  Regarding  the  second  objection, 
it  nia\  l»e  said  that  it  is  already  answered  by  the  facts.  We  know  by 
uneontro verted  testimony  that  the  effect  of  the  graduated  tax  is  in 
some  measure  a  reduction  of  excess  lioldings.  "The  conclusion  is 
inevitable,"  writes  Mr.  R.  Ewing,  the  Federal  Commissioner  of  Land 
Tax.  in  liis  fifth  annual  report  (for  the  year  3915-16)  "that  the  tax  has 
been  a  strong  factor  in  bringing  about  subdivision  and  sale  of  large 
estates.  *  *  *  The  smaller  taxpayers  increase  in  number,  but  the 
larger  taxj>ayers  diminish."  These  changes  occurred  under  the  opera- 
tion of  comparatively  low  rates  of  taxation,  though  these  were  some- 
what increased  for  the  year  1914-15.  For  the  present  year  they  have 
been  increased  by  20  per  cent.  Whether  the  market  value  of  the  lands 
changes  or  not,  the  value  to  the  excess  owner  indubitably  changes,  and 
lie  parts  with  some  of  his  possessions.  The  third  objection  is  an 
anachronism  which  better  fits  a  long-past  day.  If  a  graduated  land 
tax  is  discriminatory  as  between  individuals  or  classes,  so  also  is  a 
graduated  income  tax  or  a  graduated  inheritance  tax.  Indeed,  in  the 
last  analysis,  any  ad  valorem  tax  is  a  class  tax  because  it  discriminates 
oji  the  basis  of  possessions.  The  proposed  single  tax  itself  is  subject  to 
the  same  criticism,  since  the  amount  collected  from  each  individual 
would  depend  upon  the  value  of  the  land  holding.  According  to  this 
theory  of  social  relations,  only  such  a  tax  as  the  poll  tax  would  be 
unassailable,  because  under  it  Mr.  John  D.  Rockefeller  and  a  doUar-a-day 
common  laborer  would  pay  exactly  the  same  amount,  regardless  of  the 
dispHrity  of  their  wealth. 


40  COMMISSION   OF   IMMIGRATION    AND   HOUSING. 

THE    GRADUATED    TAX    IN    AUSTRALIA. 

There  is  a  considerable  literature  on  the  subject  of  the  Australian 
taxes.  The  statement  by  Niel  Nielsen,  Trade  Commissioner  to  America 
for  New  South  Wales,  printed  in  the  report  of  the  State  Tax  Gom- 
)nission,  summarizes  the  important  particulars  of  the  state  and  federal 
land-tax  laws.  A  land  valuation  tax  was  instituted  by  New  South  Wales 
in  18%.  This  is  not  a  griaduated  tax  in  the  sense  that  it  provides  for  a 
series  of  graduations  in  rates.  It  does,  however,  establish  two  grades — 
land  of  an  unimproved  value  below  $1,250,  which,  whether  an  individual 
holding  or  a  part  of  a  large  holding,  pays  no  tax,  and  land  of  an  unim- 
proved value  above  that  amount,  which  pays  2  cents  a  year  on  each 
$4.86.     Mr.  Nielsen  says : 

This  was  a  small  beginning,  and  the  provision  for  the  exemption  was  perhaps 
economically  incorrect,  but  it  had  a  wonderful  effect.  Land  was  immediately  put 
to  higher  uses  so  that  the  tax  might  be  paid  from  profits  and  not  from  its  capital 
value,  and  the  transition  occurred  so  rapidly  that  the  land  so  taxed  did  not 
decrease  in  value  but  actually  increased  in  value  in  direct  ratio  to  its  higher 
uses.  These  increased  values  provided  a  greater  taxable  capital  value,  and  the 
result  was  not  only  increased  production  but  by  its  greater  use  increa.sed  values 
to  the  land  and  consequently  increased  revenue  for  the  state.  The  experiment 
had  been  tried  and  found  effective. 

From  this  moment  the  system  started  to  extend  until  today  every  shire  through- 
out the  land  and  every  municipal  area,  with  the  exception  of  a  very  few  of  the 
large  cities,  derive  the  whole  of  their  revenue  from  unimproved  laud  value 
taxation. 

The  shires'  councils  can  not  collect  taxes  except  from  the  unimproved  value 
of  the  land ;  the  municipal  areas  councils  have  the  right  to  collect  taxes  both 
from  the  unimproved  value,  which  is  mandatory,  and  from  the  annual  rental 
value,  which  is  optional,  but  in  actual  practice  the  greater  number  of  them 
collect  only  on  the  unimproved  values. 

The  federal  land  tax  dates  from  1910.  It  is  a  tax  to  provide  for  the 
defense  of  the  commonwealth.  It  exempts  lands  of  an  uniniproved 
value  up  to  $25,000,  and  levies  a  tax  of  one  penny  in  the  pound,  or 
2  .cents,  on  each  $4.86,  on  values  up  to  $75,000;  4  cents  on  values  over 
$75,000  and  up  to  $150,000 ;  6  cents  on  values  over  $150,000  and  up  to 
$225,000 ;  8  cents  on  values  over  $225,000-  and  up  to  $300,000 ;  10  cents 
on  values  over  $300,000  and  up  to  $375,000,  and  12^  cents  on  higher 
values.     By  a  new  law  (1918)  these  taxes  are  raised  20  per  cent. 

J 'It  will  be  seen,"  writes  Mr.  Nielsen,  ''that  this  defense  land  tax 
does  not  fall  upon  the  small  landholders  at  all,  but  upon  the  large  land- 
holders it  presses  very  heavily,  and  it  is  meant  to  so  press  on  them'  that 
they  will  disgorge  some  of  the  large  and  valuable  areas  which  they  have 
l)ecome  possessed  of."  • 

A   GRADUATED  TAX   IN   CALIFORNIA. 

No  more  than  a  mere  outline  of  a  graduated  tax  applicable  to  Cali- 
fornia will  be  here  attempted.  The  elaboration  of  a  detailed  plan  may 
lie  made  later.     As,  moreover,  this  inquiry  relates  only  to  rural  land, 


LARGE   LANDHOLDINGS   IN    SOUTHERN    CALIFORNIA.  41 

with  a  particular  application  to  land  now  tillable  or  presumed  to  be 
susceptible  to  cultivation  at  some  future  time,  the  applicability  to  urban 
land  of  the  suggested  proposals  will  not  be  discussed.  But  that  large 
aggregate  of  land,  agricultural  or  near-agricultural,  which  because  of 
its  proximity  to  centers  of  population  has  got  beyond  an  agricultural 
classification,  may  fairly  be  included.  No  one  can  map  the  margin  of 
cultivation.  On  the  one  hand  it  extends  to  the  fringes  of  the  desert, 
and  on  the  other  hand  it  penetrates  the  high-priced  lands  within  toAvn 
and  city  limits.  In  and  about  Los  Angeles  cultivation  continues  on 
land  for  which  probably  $2,000  an  acre  would  be  refused.  Much  of  this 
land  belongs  to  o^vners  of  large  holdings,  and  its  already  inflated  pijice 
is  constantly  pushed  upward  in  spite  of  a  sluggish  market.  Its  present 
income,  consisting  of  rentals  from  tenant  cultivators,  is  a  mere  tem- 
porary' by-product  availed  of  while  the  owner  waits  for  its  sale  at  a  high 
figure.  With  the  bubble  of  inflation  pricked  out  of  it  and  its  partition 
compelled  by  a  valuation  tax,  some  of  it  at  least — much  of  it  perhaps — 
would  for  years,  until  overlapped  by  the  city's  growth,  furnish  secure 
livings  to  owner  cultivators  instead  of  furnishing  income  wrested  by 
idle  owners  from  tenant  cultivators. 

A  law  embodying  the  proposals  here  suggested  ought  also  to  be  made 
to  apply  to  mineral  and  timber  lands;  but  because  they  do  not  come 
within  the  scope  of  this  inquiry  I  have  left  them  out  of  consideration. 

As  elsewhere,  the  basis  of  a  graduated  tax  in  California  would  have 
to  be  value  and  not  acreage.  Mere  acreage,  especially  in  this  state: 
counts  for  nothing.  Moreover,  as  in  the  basis  employed  in  Australia, 
it  should  be  unimproved  value,  rather  than  improved  value.  The  deter- 
mination confessedly  involves  difficulties,  as  does  every  other  determina- 
tion relating  to  the  land.  A  discrimination  in  favor  of  "beneficially 
used"  land,  which  is  often  advocated,  would  but  add  to  the  diffi- 
culties, since  even  so  preposterous  an  employment  of  land  as  the 
pasturing  of  a  cow  on  a  million-dollar  acre  might  be  put  forward  as  an 
instance  of  beneficial  use.  The  State  Tax  Commission,  in  its  advocacy 
of  a  tax  on  future  increases  in  land  values,  admits  the  difficulty  of 
di.stinguishing  improved  from  unimproved  land,  and  suggests  the  refer- 
ence of  the  decision  to  a  "central  tax  body." 

A  necessity,  however,  in  the  fixing  of  values  is  the  determination  of 
what  is  tillable  land — land  that  is  actually  or  potentially  agricultural. 
P'or  this  determination  we  cannot  wait  for  new  federal  soil  surveys, 
nor  for  the  proposed  classification  of  lands  by  the  state.  There  is, 
however,  a  test  that  is  of  immediate  practicability — and  that  is  the 
legal  purchase  offer.  If  the  appraisers  and  the  assessors  can  not 
determine  what  is  tillable  land,  the  purchase  offer  can  find  it  with 
sureness  and  dispatch.  Let  the  law  define  as  tillable  anything,  outside 
of  mineral  and  timber  lands,  for  which  any  one  offers  to  pay  as  much 


42  COMMISSION    OF   IMMIGRATION    AND   HOUSING. 

as  $25  ail  acre,  and  the  work  of  classification  will  proceed  automatically. 
New  Zealand  has  set  a  precedent  for  this  mode  of  individual  deter- 
mination, by  an  appraisal  law  which  gives  each  owner  the  right  to 
make  his  own  appraisal,  but  also  gives  to  any  other  individual  or  to 
the  state  the  right  to  take  the  land  at  its  appraised  value,  plus  10 
per  cent. 

There  should  be  a  norm  or  standard  rate  of  taxation  for  all  holdings 
within  a  considerable  range  of  values — say  from  $5,000  to  $25,000. 
Below  this  there  should  be  a  reduced  rate — say  one-half. '  At  the  other 
extreme  a  heavy  graduation  of  rates  should  begin.  As  the  increased 
rate  on  the  higher  values  would  discourage  large  holdings,  so  the 
reduced  rate  on  the  lower  values  would  foster  home-owning  on  small 
acres.  This  gradation,  while  operating  against  all  large  holdings, 
would  still  allow  holdings  of  greater  acreage  in  the  purely  agricul- 
tural districts  unaffected  by  urban  values  than  in  the  vicinity  of  cities. 

The  exemption  of  improvements  on  small  farm  holdings  is  strongly 
urged  by  many  persons  other  than  single  taxers.  For  reasons  which 
have  already  been  given  this  contention  seems  to  have  been  pressed  to 
an  absurdity.  Nevertheless  a  distinction  may  well  be  made  between 
improvements,  on  the  one  hand,  of  moderate  value  which  serve  as  aids 
to  the  owner  cultivator,  and  on  the  other  hand,  improvements  of  great 
value  which  serve  as  a  means  of  profit  from  the  labor  of  others.  In 
other  words,  the  improvement  which  is  a  part  of  the  equipment  ®f  the 
self -producer  is  in  a  very  different  category  from  the  improvement 
which  forms  a  part  of  the  capital  of  the  employer.  It  might  be  expe- 
dient to  exempt  the  former  to  the  maximum  of  $3,000. 

Since  many  of  the  large  holdings  are  an  aggregate  of  areas  in  more 
than  one  county,  the  surtax  would  have  to  be  collected  as  a  state  tax. 
The  law  would  have  to  require  a  declaration  from  each  landowner  as 
to  his  holdings  in  counties  other  than  the  county  of  his  residence.  The 
state  would  have  to  provide  for  the  proper  returns  from  the  county 
assessors.  No  extra  machinery  would  be  needed  for  the  collection  of 
the  surtax,  which  on  information  from  the  state  as  to  the  individual's 
holdings  in  other  counties  could  be  collected  by  the  various  tax  col- 
lectors in  the  county  of  residence.  Attempted  evasions  of  the  tax  by 
hiding  a  part  of  one's  holdings  in  the  name  of  a  corporation  could  be 
met  in  various  ways.  A  suggested  method  is  to  provide  that  owner- 
ship of  stock  in  a  corporation  be  regarded  as  equivalent  to  the  owner- 
ship of  land  to  the  extent  that  land  values  constitute  part  of  the  assets 
of  the  corporation. 

THE  POLICY  OF  STATE  AID. 

The  graduated  land  tax  does  not  in  itself,  of  course,  include  state  aid 
to  the  prospective  settler.  In  this  respect  it  is  subject  to  the  same 
criticism  as  is  the  single  tax.     Nevertheless,  the  policy  of  state  aid  has 


LARGE  LANDHOLDINGS  IN   SOUTHERN   CALIFORNIA. 


43 


been  adopted  by  all  of  the  countries  that  have  seriously  attempted  to 
deal  with  the  land  problem.  In  particular,  it  has  been  carried  to 
great  lengths  by  the  governments  of  New  Zealand  and  the  Australian 
States  of  New  South  Wales  and  Victoria.  It  has  already  been  adopted 
in  California  in  the  plan  of  the  Land  Settlement  Board,  and  it  should 
be  extended  to  include  purchase  and  settlement  outside  of  that  plan. 

CONCLUSION. 

The  general  principles  and  incidence  of  the  graduated  land  tax  are 
well  understood,  and  there  seems  no  reason  for  any  further  amplifica- 
tion in  this  place.  This  summary  is  therefore  closed  with  the  sugges- 
tion that  after  fifty  years  of  agitation  in  this  state,  action  of  some  sort 
is  imperatively  needed;  and  that  unless  this  action  is  taken  soon  by 
the  responsible  forces  of  the  state  in  accord  with  a  high  standard  of 
social  justice,  it  may  be  taken  by  irresponsible  forces  more  intent  upon 
expropriation  than  equity. 


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